Minister for Health Mary Harney is expected to recommend to the Government tomorrow that relatives of those who had died and who had been illegally charged for nursing home care more than six years ago should not be refunded.
A memo setting out various repayment options is due to be brought before the Cabinet and a final decision is likely to be made in the coming weeks.
Among the issues due to be discussed are the implications of invoking the six-year statute, how repayments will be distributed, whether interest should be included in repayments and the likely impact on older people's pension entitlements.
The repayments arise out of a decision by the State to charge tens of thousands of older people in nursing homes and in long-stay public health institutions, even though there was no legal basis for the charges.
Ms Harney indicated yesterday she was in favour of allowing repayments to patients who are still alive, including any interest that may have accrued.
She is also in favour, however, of the Government applying the statute of limitations for relatives of people who died who were illegally charged more than six years ago.
Legal advice was still awaited from the Attorney General's office, Ms Harney said.
"We are still looking at the legal issue of trying using the statute of limitations. The Attorney General's advice on this is awaited and we expect a decision probably the week after this."
The Government is keen to avoid the spectre of widespread legal action and is drawing up plans for a repayment scheme that will provide redress in a speedy and efficient manner.
"We want a scheme that will encourage people to follow the administrative scheme route rather than legal route . . . there is also the issue of interest repayments," she added. "Ultimately, we will err on the side of encouraging to go down the scheme route."
Government officials estimate that the total cost of the scheme could be in the region of between €1.5 and €2 billion.
Meanwhile, the author of the report into the illegal payments, John Travers, faces a meeting of the Joint Oireachtas Committee on Health tomorrow.
The meeting is the first of a three-month series of hearings which will form part of a report on management and administration in the Department relating to illegal charges.
Mr Travers is likely to be questioned about differences in explanations provided by former Minister for Health Micheál Martin and former secretary general of the department Michael Kelly, over the delay in seeking legal advice from the Attorney General on the issue of illegal charges.
Mr Martin and Mr Kelly are due to appear before the committee next week, along with Minister of State Tim O'Malley and former minister of state Ivor Callely.
The chief executive of the Health Service Executive (South East) - formerly known as the South Eastern Health Board - is also due to appear before it.
The health board provided legal advice to the department in early 2003 alerting it to the practice of illegal charging.
The chairman of the committee, Fianna Fáil TD John Moloney, said yesterday it would consider in the coming weeks whether to request formers ministers for health, including Charles Haughey, to appear before it.