At first, it seemed that de Valera would attempt to form a minority government. Negotiations for confidence and supply with the National Labour Party failed when National Labour insisted on a formal coalition; at that time, Fianna Fáil would not enter coalitions with other parties. Nevertheless, it initially appeared that Fianna Fáil was the only party that could realistically form a government. Even though it was short of a majority, Fianna Fáil was by far the largest party in the Dáil, with 37 more seats than the next-largest party, Fine Gael.
However, the other parties realised that between them, they only had only one seat fewer than Fianna Fáil, and if they worked together, they could form a government with the support of at least seven independents. As the second-largest party in the Dáil, it was a foregone conclusion that Fine Gael would head such a coalition. In the normal course of events, Fine Gael leader Richard Mulcahy would have been the prospective coalition's nominee for Taoiseach. However, Clann na Poblachta leader Seán MacBride refused to serve under Mulcahy because of his role in carrying out 77 executions under the government of the Irish Free State in the early 1920s during the Irish Civil War. Accordingly, Mulcahy bowed out in favour of former Attorney GeneralJohn A. Costello. Costello found himself as leader of a disparate group of young and old politicians, republicans and Free Staters, conservatives and socialists. The government survived for three years, however, through the skill of Costello as Taoiseach and the independence of various ministers.
McCullagh, David (1998). A Makeshift Majority: The First Inter-Party Government, 1948-51. Dublin: Institute of Public Administration. ISBN978-1872002699.