The Minister for Agriculture was last night accused of being "involved in crooked activities for 10 years", in a bitter Dail exchange about the relationship between his Department and Emerald Meats.
The Labour Party TD, Mr Pat Rabbitte, said Mr Walsh should be ashamed of himself "having been found to have been in a blatant abuse of his position".
The Department of Agriculture and Emerald Meats have been in protracted legal battles over the allocation of quotas to import beef from outside the European Union in the late 1980s.
Both the High Court and the Supreme Court ruled against the Department's treatment of the company, which is expected to receive a multi-million-pound settlement of the case.
During the adjournment debate in the Dail, Mr Rabbitte said the Emerald Meats controversy was "a tale of how the Exchequer has been ripped off to the extent of an amount of millions of pounds by the deliberate action of servants of the State, either at political instigation or mere complicity". He said Department of Agriculture officials had acted in an "unlawful collusion with the companies in the beef-processing sector who were the intended beneficiaries of the scam".
The Goodman Group was one of the beneficiaries of changes in the beef scheme which was the subject of an investigation on RTE's Prime Time programme earlier this week.
At the start of his Dail contribution, the Minister said Mr Rabbitte was attempting "to deflect from the scandal attaching to his new political vehicle, the Labour Party, and the Wood chester four". A heated Dail exchange followed this reference to the £26,000 debt writeoff received in 1996 by Labour from Woodchester Bank.
The Minister said Mr Rabbitte was behaving disgracefully. In reply Mr Rabbitte asked: "Did the Minister see the programme [referring to Prime Time]? Is he not ashamed? Will he not apologise to the House?"
As Mr Walsh and Mr Rabbitte continued to trade abuse across the floor, ail chamber the Leas-Cheann Comhairle, Dr Rory O'Hanlon, was forced to suspend the Dail.
Mr Walsh later issued his intended script as a press release.
In his statement, the Minister accepted that there had been "shortcomings in the Department's management of the scheme concerned, by way of lack of administrative care and failure to afford the company fair procedures".
The High Court had ruled that the Department had been manifestly unfair to Emerald Meats. After the Department lost its 1997 Supreme Court appeal, the company made an offer to settle its claim for general damages out of court for £7.5 million. However, the Department never replied to this offer.