The Taoiseach defended Mr McDowell's role in the negotiations last year on the contribution of religious orders to the State redress scheme for children abused in religious-run institutions.
Mr Ahern said he took issue with the "unworthy suggestion" that the Minister for Justice, Mr McDowell, who was then Attorney General, was too busy campaigning or that his eye was off the ball at the time. "The Minister, Deputy McDowell, was a conscientious Attorney General," he added.
Mr Jim O'Keeffe (FG, Cork South-West) challenged the Taoiseach to say if Mr McDowell had been deliberately excluded from the negotiations.
Mr Ahern said Mr McDowell was completely on top of his brief. "He attended some meetings and, when he was not in attendance, he was briefed on collective decisions made by the Government," said the Taoiseach.
"The accusations are, therefore, totally untrue. Regarding, the indemnity, it was not a hidden deal."
Earlier, the Labour leader, Mr Pat Rabbitte, said he was interested in the fact that Mr McDowell, who was absent from the relevant meeting, had moved earlier in the morning to restore his damaged reputation.
"Finally, in a briefing this morning, he told journalists that Deputy Michael Woods (then Minister for Education) was wrong and that he was not involved in the deal. The Comptroller & Auditor General's report seems to bear out this statement, although the reason he was not involved is a different question," he added.
Mr Rabbitte said that together with an official from his Department, Dr Woods had attended confidential meetings with religious congregations "in which the latter were accompanied by solicitors and a senior counsel, during which they did this shameful, secret, negligent and fraudulent deal".-
On the Taoiseach's defence of Mr McDowell, the Labour leader said: "Not only was the then Attorney General not on top of his brief, he was on top of a pole."
Mr McDowell, who was sitting on the Government benches, remarked: "That is a cheap, unworthy jibe."
Mr Rabbitte claimed that Mr Ahern had misled the House about the indemnity deed, given that its terms were never debated in the House until Deputy Róisín Shortall had raised the issue after the election and when the deal was done.
"The Taoiseach calculatedly and deliberately lied to this House yesterday, and Deputy Woods sought to agree with him," he added.
Pressed by the Ceann Comhairle, Dr Rory O'Hanlon, to withdraw the remark, Mr Rabbitte eventually agreed, adding "a rose by any other name."
Describing Mr Rabbitte's remarks as a "diatribe", Mr Ahern said that the indemnity was raised, discussed and debated in a number of questions. On March 8th, 2002, during the second stage of the Residential Institutions Redress Bill 2001, the Minister had spoken about the broad thrust of the indemnity agreed in principle with the religious orders."
Mr Ahern said the matter had been debated in the House more than any other deal. "I will continue to say for as long as I am around this House, or outside it for that matter, that it was a good deal," he added.
He accused the Labour leader, Mr Pat Rabbitte, and members of the Rainbow Government of refusing to meet the people who wished to put their case.
Mr Rabbitte said that the report of the Comptroller and Auditor General was "a litany of mismanagement, incompetence and waste", adding that the party which was supposed to be able to run the country was running it into the ground.
"The worst waste of all is the deal with the religious congregations," he added.
"Obviously, the Taoiseach does not care about mismanagement of taxpayers' money.
"How can he seek to defend the deal, estimated by the Comptroller and Auditor General's forensic report, in the same fashion as he sought to dismiss the deficiencies in the deal, as I highlighted in the House last February ?"
