The claim by a Government department that policy championed by Minster for Health James Reilly could risk the State's financial stability has the potential to be one of the most serious Coalition disagreements yet.

Fine Gael placed universal health insurance (UHI) at the heart of its 2011 general election manifesto. It is a policy Dr Reilly has described as his reason for entering politics.

His political career turns on its implementation. And the tone of the reply from the Department of Health to Public Expenditure and Reform officials underlines how high the stakes are.

Suggestions that the policy could cost the State €2 billion a year, with employers having to shoulder a €7 billion cost, are described as “exaggerated or unsubstantiated claims”. There is also a determination not to allow such concerns “frustrate or delay” the introduction of UHI.

While the Department of Finance has also raised issue of costings, the battle is between Brendan Howlin and Dr Reilly. But it is likely to spill over into the rest of the Coalition.

Taoiseach Enda Kenny will undoubtedly have to back his man and Tánaiste Eamon Gilmore his. However given the criticism of UHI, it is questionable if Dr Reilly can press ahead with it as is, or at all.

Opposition's opportunity
At the very least, the Opposition has been handed ammunition with which to rubbish the Government's health policy and warn voters they will pay more for something that puts economic recovery at risk.

The development is also a serious escalation of the ongoing dispute between Dr Reilly and Mr Howlin, a relationship already the most fraught in Government.

What started as natural tension between the Minister in charge of how money is spent and the Minister who spends the most, has descended into something worse.

Mr Howlin’s side mocked Dr Reilly’s negotiating skills in the run-up to the last budget and some in Fine Gael claimed the savings achieved in the Department of Public Expenditure’s Haddington Road Agreement were “phoney”.

HSE service plan
That was just the most recent in a series of clashes over budgets, with the Labour Party having long since come to the view that Dr Reilly is not up to his job. One Labour source said Dr Reilly's recent presentation of the HSE service plan to Cabinet was met with the "usual rolled eyes".

It was in the aftermath of the last budget that Dr Reilly probably felt most isolated, with backbenchers and others close to him claiming he got a "bad deal" and blaming Taoiseach Enda Kenny and Minister for Finance Michael Noonan for not defending him.

Those around him say Dr Reilly is the victim of a sustained briefing campaign, with every critical utterance from Public Expenditure finding its way into the media.

“Is it personal, or is it tension between Howlin and the biggest spending department?” asked one source. “Can’t you have a row and just get on with it? Why are they briefing all the time, is it some sort of strategy to make Labour look different? The UHI policy is agreed in the programme for government. Labour signed up to this.”

While the junior Coalition partner may have signed up to it they were not in full agreement.

Sources close to Dr Reilly see opposition to his proposals as an attempt to reopen a fight already settled.