The Minister for Finance, Mr McCreevy, has accepted a series of recommendations from a critical Oireachtas report on the controversial funding of the Punchestown Equestrian Centre.
The report found that no proper evaluation of the project took place before the Government decided to provide it with €14.8 million in funding.
From now on legal agreements will be required in relation to the State funding of major private projects such as Punchestown, Mr McCreevy has told the Public Accounts Committee, which produced the report.
However, it has emerged that the belated legal agreement between the State and Punchestown, signed just three months ago as a result of the controversy, may now have to be scrapped.
The Irish Times has learned that serious flaws have been discovered in the original leases signed between various legal entities associated with Punchestown, which may result in a new contract between the State and Punchestown having to be drafted.
According to well-placed horse industry sources, these leases may have to be declared null and void, with knock-on implications for the entities which have signed the agreement with the Government.
Yesterday it emerged that Mr McCreevy had sent a minute to the Public Accounts Committee, whose report on the project, in the Minister's own constituency, criticised the Department of Finance for failing to ensure the project was properly evaluated.
The Department of Agriculture was heavily criticised for failing to evaluate the project properly and for failing to obtain a legal agreement between Punchestown racecourse and the State in relation to the operation of the centre.
In his response to the report, in the form of a minute to the committee, Mr McCreevy accepted the report's general recommendations that legal agreements for projects such as Punchestown would have to be put in place in the future.
However, the minute stated that the Department of Agriculture believed "at the time" it had applied evaluation procedures on the project.
While it was "not a normal type of grant proposal" and was difficult to evaluate, it was evaluated carefully by the Department of Agriculture, according to the reply.
However, Mr McCreevy accepted key recommendations that his Department clarify its role in approving projects and ensuring that evaluation guidelines are adhered to.
"The Minister would ask the committee to note that, to facilitate a better appraisal regime and better overall compliance with the guidelines, his Department is currently putting in place arrangements for all Departments which will address these concerns," according to the minute.
This would be done through "a combination of the implementation of the multi-annual investment framework . . . and a revision of his Department's guidelines for appraisal and management of capital expenditure".
Yesterday the chairman of the Public Accounts Committee, Mr John Perry, welcomed the minute as "a vindication of our report".
"Our investigation uncovered a series of problems concerning the funding of this centre, including deficiencies regarding the evaluation of the project, and these have been accepted.
"Now all Government Departments will have to adhere to proper evaluation guidelines when funding large projects of this nature," he said.