His father was a veteran of the 1916 Easter Rising and a former adjutant in the Irish Republican Army (IRA), who was elected to Dáil Éireann in 1944, as a Fianna Fáil candidate.

He was promoted as Minister for Industry and Commerce, in a cabinet reshuffle in July 1966, and he continued the government policy of economic expansion that had prevailed since the late 1950s.

Charles Haughey and Neil Blaney, also declared their interest in the leadership; however, both withdrew when the Minister for Finance, Jack Lynch, announced his candidacy.

Following Fianna Fáil's success at the 1969 general election, Colley held onto his existing cabinet post and also took charge of the Gaeltacht portfolio, an area where he had a personal interest.

He set about changing the traditional view of the Irish-speaking regions as backward and promoted their equal claim to the more sophisticated industries being established in Ireland by foreign investment.

Four Ministers, Charles Haughey, Neil Blaney, Kevin Boland and Mícheál Ó Móráin, were either removed, resigned, or simply retired from the government due to the scandal that was about to unfold.

Despite his defeat by Jack Lynch in the leadership contest four years earlier, Colley had remained loyal to the party leader and had become a close political ally.

He also championed the introduction of RTÉ Raidió na Gaeltachta and argued the financial case for it in 1972, as the Minister with responsibility for the Gaeltacht.

In 1973, Fianna Fáil was ousted after sixteen years in government when the national coalition of Fine Gael and the Labour Party came to power.

He came to be regarded as a hard-working spokesman and was a constant critic of what he viewed as the coalition government's restrictive economic policy and of the capital taxation which he believed discouraged investment.

Fianna Fáil swept to power at the 1977 general election, with a 20-seat Dáil majority, contrary to opinion polls and political commentators.

His policy of low taxation and continued government investment resulted in massive foreign borrowing and a balance of payments deficit.

Fianna Fáil lost power at the 1981 general election when a short-lived Fine Gael-Labour Party coalition government took office.

Fianna Fáil regained office at the February 1982 general election, but there was disquiet about Haughey's leadership and the failure to secure an overall majority.

Several unsuccessful leadership challenges took place in late 1982 and early 1983, with Colley now supporting Desmond O'Malley and the Gang of 22 who opposed Haughey.