Fine Gael has told TDs the government would have to reverse the increase in child benefit, if water charges are scrapped.
Today Fm news reports that increases in welfare spending, and income tax cuts announced in the Budget, would need to be cancelled to make up for lost revenue.
Over the weekend, Enda Kenny said income tax would have to rise by 4% if the charges were to be abolished.
A note to TDS stated that without water charges, the EU would treat Irish Water as just another part of the government and more austerity would be needed to meet targets. The only way to avoid that 4% hike would be to reverse the measures introduced in the Budget including the increase to child benefit.
The Fine Gael leader told guests at his party's Presidential dinner on Saturday, that his Government's decisions have been "painful and difficult" for many people, but the current water system is not fit for purpose.
The Taoiseach also stated that he was not prepared to drop the charges.
Over a hundred thousand people marched through towns, villages and cities across the country on Saturday, calling on the Government to abolish water charges.
The Right 2 Water campaign has been described as the largest public demonstration, in the lifetime of this Government.
More than 90 seperate rallies were held nationwide today, with the first getting underway in Dublin from 11am.