Minister for Health Simon Harris has been warned that the new children’s hospital will likely cost significantly more than the original estimate.

A briefing prepared for the minister this month indicated that the bill could be far higher than previously thought because of inflation in the construction industry.

Some €650 million was originally earmarked for the development at St James’s Hospital - a location criticised by some over size, parking and access issues - as well as two satellite centres at Connolly and Tallaght.

The last government committed to providing €200 million from the sale of the National Lottery to the long-delayed project, on top of €450 million in exchequer funding.

But the last cost projection was based on figures from 2014, when the average rate for construction inflation was 3%.

The briefing noted that "all industry commentators" are now reporting increases of up to 7.5% in the sector.

The Department of Health said the project is currently being examined to update cost estimates.

Planning permission for the hospital was granted last month and construction is expected to begin this summer.

The two satellite centres are due to open in 2018, with work on the main site scheduled for completion in 2020.