Minister Simon Coveney has said he won't introduce any scheme of water charges which doesn't charge people for wasteful usage.
His position puts the government on a major collision course with Fianna Fáil.
The two parties had agreed to implement the findings of an Oireachtas committee, which appears set to call for no domestic charges at all.
But Simon Coveney says that regime would be illegal under EU law - and there's no way he can implement it.
"We're happy to compromise within reason," he said. "But if that compromises involves us essentially doing something that is exposing the state to legal action than as an office holder I won't be able to facilitate that."
Oireachtas committee
The group of 20 TDs is expected to finalise the contents of its report by Wednesday ahead of a Dáil vote due to take place in March.
The Irish Times has reported that the committee has reached agreement on a number of issues – including returning money to those who paid their bills.
According to the report, it is not known whether the refunds should come in the form of a cash payment, tax credit or some other system.
Reaction
Paul Murphy of the Anti-Austerity Alliance said that Coveney's responses "smacks of shocking arrogance".
"He effectively declares that he will not introduce legislation to scrap water charges, even if the Dail votes in the majority for him to do so," he said. "That is in blatant contradiction of his party's 'Supply & Confidence Agreement' with Fianna Fail, and much more importantly, with any principle of democracy. His figleaf? The argument that EU law requires water charges – an argument which was demolished by not one, but two lawyers at the water committee.
"Pressure will be kept on Fianna Fail from the anti-water charges movement to ensure that no backroom deal is done. If they stick to the position they outlined today, Coveney has two choices. He can admit defeat, that water charges are gone and implement the appropriate legislation. Or he can precipitate a general election with Enda Kenny in position as Fine Gael leader, with an election focused on the issues of water charges and the Maurice McCabe scandal of black propaganda in the Gardai. Your choice Simon.”
