The Department of Finance says the €270 million of fresh funding it has paid this month to Irish Water is for capital expenditure and "is not connected" with the ending of water charges.

The Government paid over the cash to the utility on August 8th, after the payment was approved at a Cabinet meeting on July 18th, the department confirmed. It said the cash constitutes the State’s contribution for 2017 as part of the Irish Water business plan, which includes capital expenditure of €5.5 billion over seven years to 2021.

The department says the issue of plugging the gap caused by the abolition of charges will “be considered as part of the overall fiscal arithmetic to be updated for Budget 2018 in October”.