BENEFITS TO society over the past decade from Government policies were no "mirage", Taoiseach Brian Cowen has insisted as he rejected Fine Gael claims of "wanton waste".

During combative Dáil exchanges with party leader Enda Kenny, Mr Cowen said: "I accept my responsibilities in respect of everything I have done in public office. I will not have that record misrepresented by you."

The Taoiseach was responding to Mr Kenny's demand that he explain how a €6 billion surplus was turned into a €15 billion deficit, bringing people to the "financial cliff face".

The Fine Gael leader also demanded he explain how, based on published data, Ireland is now the only country in Europe in recession and after "wanton waste" the Government was softening up the public for a "financial Armageddon" in the Budget.

Amid persistent heckling, Mr Cowen retorted: "I won't accept that the basic Government strategy over the last 10 years was a mirage, was something that didn't bring benefit to our people. It certainly did and those days, if we provide the proper financial and prudent management to this economy, those days can return to Ireland, despite your exaggerated claims."

The Taoiseach insisted: "I will lead a Government that will take the necessary decisions to take into account the new economic situation that has now developed in this country and we'll face those challenges in the same way we have in the past".

Mr Kenny said the Taoiseach was responsible for building the biggest property bubble ever, the most indebted financial system, the biggest loss in competitiveness and biggest deterioration in public finances.

"You never accept any responsibility for the actions of your Government," Mr Kenny added.

But Mr Cowen replied: "During the period of what you call proliferated spend, we were able to make up major historical deficits of under-investment in day-to-day services and capital programme."

The Taoiseach said there was a particular issue on the domestic front which is also affecting the economy - the reduction in residential housing output, which is a drag of about 4 per cent on growth this year alone.

"That in itself is a particular reason beyond what one can look to other countries as being a reason for the present performance of our economy."

He said the economy had provided itself with the ability to reduce debt considerably, as had the National Pension Reserve Fund which provided 14 per cent of GNP.

The Taoiseach told Mr Kenny he was suggesting the Government should not have doubled pensions when it could afford to do so.

He added: "I don't regard the investments successfully made by governments over the last 10 years as wanton waste.

"We've increased the average industrial wage by €14,500 in that period, and reducing the tax take on those wages by €400," the Taoiseach said.

The Government introduced pro-enterprise, pro-investment, pro-jobs policies which were far superior to any other member state in the EU, Mr Cowen insisted.