Ministers have rejected "unfounded allegations" that the State will provide £8.8 million in aid to Nigeria if it co-operates with an agreement to allow failed Nigerian asylum-seekers to be returned.
The Minister for Justice, Equality and Law Reform said there was no question of Ireland's aid to Nigeria being dependent on the repatriation agreement.
Mr O'Donoghue is due to sign the agreement in Nigeria at the end of the month. It will allow the Irish authorities to step up the deportation to Nigeria of hundreds of failed asylum-seekers.
The Minister of State for Overseas Aid, Ms Liz O'Donnell, said the readmission agreement "refers to Ireland's continuing commitment to development co-operation with Nigeria, focused on basic needs and poverty reduction.
"It is not conditional, nor does it guarantee a specific amount of funding to be channelled to development projects in Nigeria, and therefore the figure of £8.8 million is absurd," she said.
Ireland's development assistance in Nigeria was channelled entirely through non-governmental missionary groups, not through the Nigerian government.
Nigeria is not one of Ireland Aid's six priority countries in Africa and has no agreement for government-to-government assistance from Ireland, she added.
Ireland Aid spent more than £450,000 on development co-operation projects in Nigeria last year and more than £350,000 this year to date.
Both Ministers issued statements yesterday in response to reports that the Government planned to give an £8.8 million "bribe" to Nigeria in return for its co-operation with the readmission agreement.
Nigerians accounted for about a third of the 4,769 asylum applicants for the first six months of this year. Fewer than 7 per cent of Nigerian applicants for refugee status have been successful. Some 500 have been issued with deportation orders, which are outstanding.
The forthcoming Nigerian deal will be the third such signed by Ireland. Similar readmission arrangements are already in place with the authorities in Romania and Poland. A fourth agreement has been approved with Bulgaria and is due to be signed shortly.
Mr Donncha O'Connell, from the Irish Council for Civil Liberties, said the funding issue "made no different to the fundamental point that readmission agreements are bad for the asylum process".
Such agreements "lead to the treatment of asylum-seekers from particular countries as class claims as opposed to individuals, which is contrary to international refugee protection law," he said.