Fine Gael has claimed the Government paid five times the going rate when it agreed to spend €30 million on the site at Thornton, Co Dublin, which will house the new prison complex that will replace Mountjoy.
Senior property industry sources supported the claims by Fine Gael's justice spokesman, Mr Jim O'Keeffe. However, a spokeswoman for the Minister for Justice, Mr McDowell, denied the Government had paid over the odds for the land on the Dublin-Meath border.
Mr O'Keeffe said "property experts" familiar with the value of commercial land had told him that farmland in the area was worth €20,000 an acre while the maximum possible commercial valuation - "including hope value" - was in the order of €40,000 an acre. "For some reason best known to himself, the Minister paid a grand total of €30 million, about €200,000 per acre. He must now explain why he paid €24 million too much," he said.
Mr McDowell's spokeswoman said the Government had been advised by the Office of Public Works that "the price could not be regarded as exorbitant".
She said the Government placed advertisements early last year in which it asked land-owners with properties of sufficient scale to come forward with sale offers.
"The average price of the land-owners who did respond was above €200,000 per acre. Some of them sought as much as €500,000 an acre," she said.
"Thirty sites were examined and only about five of those were deemed suitable. Of those suitable sites, the price of the Thornton site was lower than asking prices for other suitable lands."
However, Mr O'Keeffe said it appeared the Government had bought "the most expensive farm" in Europe. "If that's the process, the process is wrong."
A senior property industry source with experience of recent land sales in the Co Dublin area said agricultural land there was worth €20,000-€30,000 per acre.
While a "special category" purchaser such as the Government might expect to pay three times the going rate, he said the price agreed in the Thornton deal could not be justified on the basis of recent transactions.