He told the Dáil the cost could rise into the billions
The State would face immediate costs of up to €160m if Irish Water was scrapped, according to the minister in charge.
Simon Coveney says the costs would be rung up from having to let go of staff who transferred from local authorities.
But he has also told the Dáil the cost could rise into the billions, as potential savings would be lost in future.
Minister Coveney says the costs were calculated as part of Fine Gael's pre-government talks with Fianna Fáil.
His comments come after an uncertain 24 hours over the water charges.
The minority Government now looks set to defeat an opposition motion on water charges on Wednesday, despite uncertainty about a junior minister and what Fianna Fáil would do.
Independent TD and Minister of State John Halligan will now support the Government, after earlier suggesting yesterday he might side with the opposition.
Yesterday, Mr Halligan said: "In conscience I don't agree with Irish Water and I think it should be scrapped."
"I think Irish Water is finished as an entity," he added.
It later emerged Mr Halligan had changed his mind, and would now side with the Government.
Meanwhile, Fianna Fáil has refused to support the motion calling for the abolition of the charges.