Hmm yes I see the difficulties. The Northerners would have had a few problems with "Frank O'Connor" (and there was still a certain sniffiness about divorce in Ulster during the fifties and sixties too) and would have been outrightly hostile to Sean O'Faolin (he not only had a history of extremism but had bought into the racial myth of the Gael). Sam Hanna Bell would be an option, he wrote Summer Loanen in 1943 and December Bride in 1951 so would already have established his reputation. John Hewitt (who was a radical socialist) might have had a better chance with a Labour government in NI but might be too left wing for your dominion of Ireland? And there is W.R. Rodgers who was well regarded in the South as well as North of Ireland OTL.
But maybe the best man for the job would be Mervyn Wall who was a capable administator as well as a fine writer and OTL managed the Irish Arts Council 1957-75. Not quite of the same literary calibre as Kavanagh or O'Connor but much more dignified and less quarrelsome than Kavanagh.
Thank you for suggesting John Hewitt, W.R. Rodgers and Mervyn Wall. I didn't know about them. John Hewitt was too left-wing, and I think Wall would be a better choice than Rodgers, so he became President of the Council of Ireland in October 1959.