The Minister for Public Enterprise, Ms O'Rourke, said she was confident the State will receive full EU funding for the Luas light rail. The Government remained committed to a "properly assessed" light-rail system for the capital.

Ms O'Rourke was responding to the Fine Gael spokesman on public enterprise, Mr Ivan Yates, who asked if the Minister had been assured by the Commission that the study into the underground aspects of Luas would not jeopardise funds.

"I am very satisfied that the money will be drawn down," Mrs O'Rourke said. "I am very satisfied that we will have a light-rail structure for Dublin which will best be fitted for the city, no matter which is the preferred option."

Mr Yates said the EU monitoring committee had said the funds would have to be recommitted unless the proposal was able to go a head in the spring. If the EU money was in any way jeopardised would the Government still fund the project?

"The Government is committed to a properly assessed light-rail project," Mrs O'Rourke replied.