The Oireachtas water committee is voting on its final report
Social Protection Minister Leo Varadkar says Fianna Fáil knows well the Government is not obliged to bring forward legislation it knows is contrary to European law.
Mr Varadkar has been quizzed in the Dáil about the confidence and supply agreement - which does say the Government will facilitate the passage of legislation to give effect to the water committee report.
Appendix 2 of the agreement reads: "The Government will facilitate the passage of legislation (whether it be a money bill or otherwise) for the implementation of the recommendations in relation to domestic water charging supported by the Oireachtas".
The committee on the Future Funding of Domestic Water Services is meeting to agree its final report.
The report calls for the scrapping of water charges, makes no reference to excessive charges and recommends refunds for householders.
It also ends mandatory metering of new houses and provides for a referendum to keep the resource in public ownership.
The recommendations are due to be debated in the Dáil next week.
Housing Minister Simon Coveney says he will have to wait and see what the committee outcome is: "I do have real concerns about the changes that have been made that, in my view, seem to fundamentally undermine the viability and the legality of what they're recommending.
"Let's wait and see if that is the final outcome of the committee - if it is, well then we have to deal with the issues that flow from that."
Solidarity TD Paul Murphy claimed in the Dáil that Fine Gael was now rejecting the legal advice it itself had demanded: "Your people said 'lets go and get legal advice' yesterday - 'lets go and ring a lawyer in Tokyo to ask is it OK to get rid of excessive usage charges'. The lawyer comes back and says 'yeah, it's grand'.
"Now your people say it's not proper legal advice. You're OK with a special committee deciding on it, as long as it decides the way you want".
Minister Varadkar, taking leaders questions, said they will not implement legislation the Attorney-General says is not compliant with the EU Water Framework Directive.
He also took a shot at Fianna Fáil, replying to Paul Murphy: "It's the role you've played in reducing Fianna Fáil - the party of Lemass, a party that was once proud to stand up for things, that would do the right things by the Irish people is now in a position that it determines its policy on water solely out of their fear of you and their fear of Sinn Féin."
Fianna Fáil’s spokesperson on housing Barry Cowen said earlier there is no need for the dispute to lead to fresh elections.
"I don’t think the electorate want an election at this time," he said. "We didn’t think that last year; we didn’t think water charges should be an issue to go back to the country with.”
"However, we are obliged to represent many of those who voted for us on that issue amongst other things and we are true to our word in relation to our manifesto and we are true to our word in relation to the submission we made to the expert commission."
The committee’s recommendations have been hailed as a victory by Sinn Féin and other opposition parties.
Fine Gael TD and committee member Colm Brophy said earlier the party will not do anything that is illegal.
"There cannot be a solution brought forward or passed, I believe, by the Oireachtas which is not legal," he said.
"But there is opportunity to make sure that we try and make sure that we do pass a resolution that is able to stand up to the task of meeting the water framework directive."