Fine Gael and Labour have voted against each other for the first time in the history of the current government.
Labour senators joined the opposition to approve calls for a referendum to make sure Irish Water cannot be sold.
The party backed a vote calling for a referendum on Irish Water privatisation.
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The Seanad voted unanimously to approve the plans by Fianna Fáil.
The Environment Minister Alan Kelly has spoken in the chamber on Irish Water, and says setting up the utility was the right thing to do.