The Government has confirmed it plans to establish a new Land Development Agency to tackle the ongoing housing crisis.

At the Fine Gael think in Galway this afternoon, the Taoiseach said the new agency will be handed €1.25bn to build social, affordable and private homes.

Leo Varadkar said the Housing Minister Eoghan Murphy will bring the proposal to Cabinet next week.

“This is a step change in the Government’s involvement in the housing market,” he said.

“We are going to build new homes and lots of them.

“Social housing, affordable housing, private housing and cost rental on state owned land and privately-owned land.”

He said the intervention is “50 years overdue” adding that he believes it will eventually be seen as being as significant as the establishment of the ESB,  Aer Lingus or the IDA.

Homeless crisis

Meanwhile, Minister Murphy has written to some local authorities, threatening to take powers off them if they don’t do more to tackle the homeless crisis.

The number of people living in emergency accommodation currently stands at just under 10,000.

A national protest against the housing crisis will take place on October the 3rd.

Also speaking in Galway, Eoghan Murphy said he understands that the public has had enough.

He explained: "I think it's right for people to say enough is enough in certain areas - when we see the number of families that are in emergency accommodation today and tonight, it's unacceptable.

"That's why I wrote to certain local authorities yesterday, to tell them there are changes they need to make immediately. If they don't, I will have recourse to emergency powers within my department to step in and take control of some of those functions."

"Going in the wrong direction"

Earlier, Mr Varadkar acknowledged that progress hasn't been made in reducing the number of people experiencing homelessness.

The Taoiseach said: "It is evident to everyone that we are still going in the wrong direction when it comes to emergency accommodation – and we are by no means in denial about that.

"But it is something that we are working on and, just like the unemployment crisis or the economic crisis, it can take time for policies to work."

Earlier this week, it was confirmed that Sinn Féin is planning table a motion of no confidence in the Housing Minister - although Fianna Fáil, which is supporting the minority government through the confidence and supply agreement, has said it will not back the motion.

Additional reporting Michael Staines ...