Controversial Irish TD Mick Wallace last night told First Minister Peter Robinson that he should "concentrate on stabilising the political situation in Northern Ireland, rather than taking legal action to shut down debate on an issue of great public concern".
In a stinging counter-punch to Mr Robinson's threat to sue him over the contents of a tweet, the Wexford TD said: "One would have thought that Mr Robinson would make better use of his time if he concentrated on stabilising the political situation in Northern Ireland, rather than taking legal action to shut down debate on an issue that is of great public concern, in particular for the taxpayer in the Republic of Ireland.
"What is needed is open debate and transparency - something in short supply North and South of Ireland."
The Belfast Telegraph revealed yesterday that the First Minister had put Mr Wallace on notice that he intended to sue him.
Yesterday Mr Wallace, whose allegations about a £1bn Nama property deal sparked a series of investigations, said he would not be deterred by the legal threat. Speaking through his solicitor, Mr Wallace told the Belfast Telegraph: "Should Mr Robinson wish to pursue the matter, in whichever jurisdiction he opts for, the action will be defended in full and all the arguments will be fully ventilated at that point."
Paul Tweed, Mr Robinson's lawyer, told this newspaper that he had written to Mr Wallace warning he would be sued if he did not retract last month's "defamatory tweet" about Mr Robinson.
Mr Wallace had earlier claimed in the Dail that there was £7m in an overseas bank account, partly for a Northern Ireland politician.
He claimed this represented a politician's cut for helping with the sale of the Nama portfolio of land in Northern Ireland.
Nama is the Republic's bad bank, which bought up properties taken into public ownership after the banking crisis. These include Northern Ireland properties worth £4.5bn, which were sold to Cerberus Capital Management, an American company, last year. Nama had originally acquired the properties for just £1bn.
All firms involved in the Northern Ireland assets sale have denied any wrongdoing.
Mr Robinson has also denied any link to the deal, and said no one in his family or the DUP hoped to benefit "one penny" from the huge property deal.
The allegations have sparked probes by specialist detectives and politicians on both sides of the border.
Yesterday Mr Robinson was asked about the action in a Press conference.
He replied: "I leave that entirely with my lawyers. I am not going to step into that arena. It is a matter of some importance that people who want to make up stories are challenged on the stories that they make up. My legal team will be looking after that."
Mr Tweed told this newspaper it had not been decided if any action would take place in Dublin, Belfast or both. Mr Tweed, a libel specialist, often opens an action in both jurisdictions, but generally proceeds in one area first.
Yesterday Gareth Noble, Mr Wallace's Dublin solicitor, confirmed that Mr Tweed's letter had been received. "We will respond in full to that letter in the coming days," said Mr Noble. He is a juvenile justice expert at KOD Lyons Solicitors, well-known for its expertise in human rights and criminal law.
He added: "Deputy Wallace has a proud public record of highlighting important matters in the public interest in relation to issues which demand transparency, openness and accountability. He shall not be distracted or deterred from continuing this work by the threat of legal action."