Pleas from the Construction Industry Federation for further State concessions for developers, including a radical reduction in apartment sizes, were firmly rejected by Ministers at a meeting last week.
The federation was brought before a Cabinet subcommittee to discuss their views on the housing sector with Taoiseach Enda Kenny, Minister for Finance Michael Noonan, Minister for Public Expenditure Paschal Donohoe and Minister for Housing Simon Coveney, although Mr Coveney left early to focus on the issue of water charges.
Mr Donohoe, in particular, was said to have been angered by the presentation from the federation's Tom Parlon and Hubert Fitzpatrick.
One of the main issues they highlighted was that it felt it was not viable for developers to build apartments in Dublin and that smaller apartments would be more suitable for certain workers, such as those in tech firms such as Google and Facebook.
Mr Fitzpatrick and Mr Parlon, a former Progressive Democrats junior minister for finance, argued for smaller apartments, similar to the standards that apply in the UK. This would be in addition to changes made to apartment standards by the last government.
It is also understood the federation advocated a further expansion of the Help to Buy scheme announced in the budget, which allows for an income tax refund to help first-time buyers accumulate a mortgage deposit.
Mr Donohoe is said to have reacted angrily and outlined increased State funding and Government measures to help boost the supply of housing and challenged the CIF about what the building industry is doing. Mr Noonan is also said to have delivered a similar message, although in a more understated manner.
“The State has thrown the kitchen sink at this over the past 18 months to two years,” one source said yesterday.
Mr Parlon said many State initiatives have been promised but have yet to be fully delivered, such as the Help to Buy scheme only taking effect from January.
“I think Tom tried to pull it back with his political skills but the damage was done at that stage,” said one figure.
Another source claimed Mr Donohoe was attempting to be the "tough guy" and suggested that it could be linked to possible Fine Gael leadership ambitions, although he has said he will not seek to succeed Mr Kenny.
Nama also gave a presentation to the meeting, although this was described by sources as “upbeat”.