The Cabinet will today discuss proposals that amount to a watering down of restrictions sought by the National Public Health Emergency Team (Nphet).
While chief medical officer Dr Tony Holohan and his team recommended a total ban on children gathering indoors for two weeks, parents will instead be told to limit activities to one play date or event per week.
It means that pantos and other Christmas events such as nativity plays or parties can go ahead - but parents should pick between them.
"In practical terms we will be telling parents that if their child is having a play date and a visit to the pantomime in one week, we will be urging a choice of one of those things - not both," the source said.
Mask wearing for nine-year- olds in school, shops and public transport are also among the proposals.
Public health doctors told senior Government ministers last night in a crunch meeting that infection rates for both the five to 11 years age group and their parents are "high".
Parenting expert Laura Erskine said no parent wants to see their children's extracurricular activities halted.
She told the Herald: "These social, hobbies and sporting activities are so important as a healthy outlet for children.
"If it is advised by the experts who are crunching the numbers on the spread of Covid among our unvaccinated children to simply pull back a little on activities outside of school, then it is a small price to pay to keep children in school, still able to pursue one 'mental health' activity a week and hopefully allow families to move forward with their plans to spend time with their loved ones over Christmas."
Meanwhile, Cabinet ministers will also today consider a plan requiring proof of a negative rapid antigen Covid test for all travellers landing at Irish ports and airports - irrespective of whether they are vaccinated or not.
It is understood the expert advice from Nphet was to opt for the more expensive, slower and reliable PCR tests.
But ministers will be asked to back a plan for the swifter and cheaper antigen tests - but these must be professionally done, not via a do-it-yourself model.
The timeframe within which the test must be done before travelling was not decided. However, one source suggested it would be within 48 hours before travelling.
The Government is also set to sign off on legislation which would put in place laws for mandatory hotel quarantine, which can be activated when needed.
Officials across four government departments were last night unable to say how the suggested new rules demanding a negative Covid test for every traveller would sit alongside the UK-Ireland common travel area.
There is no requirement for a negative pre-flight test for Irish passengers travelling to the UK.
The EU Commission is not recommending such a demand for tests at present but Portugal has already decided on its own account to demand either a negative antigen test from within 24 hours, or a negative PCR result from within 72 hours.
The meeting last night heard that there has been a stabilisation of infection figures in recent days.
The three Coalition leaders and Health Minister Stephen Donnelly met Dr Holohan, Dr Ronan Glynn, and Nphet members Phillip Nolan and Cillian de Gascun.
Public health experts gave the latest update on the Omicron variant.
The meeting heard that there is still "ongoing concern" over virus infection rates and the need to reduce socialisation.