Fine Gael has agreed to examine if penalties for excessive usage of water will meet European law in a proposed compromise with Fianna Fáil.
Minister for Housing Simon Coveney is understood to be willing to assess the 2007 Water Services Act to determine if it meets the EU Water Framework Directive.
There is provision in the legislation to allow for a fine of up to €5,000 to be imposed on a householder who abuses water.
In return Fianna Fáil has agreed to amend the legislation to include a specific allowance which could be described as excessive usage.
The two parties have still not reached an agreement on the roll out of the metering programme. Fine Gael is insisting their installation must continue and Fianna Fáil believing excessive usage can be identified by district metering.
Fine Gael and Fianna Fáil submitted their party positions to the Oireachtas committee examining water services at midday on Friday.
In its submission, Fianna Fáil strongly criticised Mr Coveney for intervening in the work of the committee.
The move, which it described as “unprecedented”, came before the committee had completed its deliberations.
The paper reads: “The intervention from the Minister was unhelpful and while it is accepted that the Attorney General provides advice to government it would be unprecedented that the Attorney General would advise the Oireachtas.”
On the issue of refunds,Fianna Fáil believes they should come from Revenue but should have the conservation grant deduced from them.
In its submission, Fine Gael said it will not support legislation which is in breach of European law and stresses its desire for a charge for excessive water usage.
The paper says the metering programme should continue insisting it is the only method to determine wastage of water.
Fine Gael insists the people who did not pay their charges should be pursued but said this must have regard to the potential administrative costs of recovery.
The party does not state its position on refunding those who paid their charges, only insisting those who have paid their water bills to date will be treated no less favourably than those who have not.
Support for Coveney
Both sides have played down the prospect of a general election on the water issue.
Speaking Thursday, Minister for Housing Simon Coveney said the general taxpayer should not have to pay for those who waste water.
On that basis it would be “very strange” if water meters were not used to detect excessive water consumption by households, Mr Coveney said.
He added: “There are nearly 900,000 meters in the ground across the country it makes sense to use that infrastructure to ensure that if people use very large volumes of water that they pay for that rather than the tax payer.
Senior Ministers and Taoiseach Enda Kenny supported Mr Coveney’s position on the issue despite threats of a general election.
Ministers have received a 30-page opinion from the Attorney General, which insists it would be illegal not to enforce the polluter pays principle.
Fianna Fáil produced its legal opinion on Thursday from senior counsel Conleth Bradley and barrister Darren Lehane, who is a former Fianna Fáil local election candidate.
It states that while Ireland is bound by the European Water Framework Directive, it has a "wide discretion" as to how the principle is implemented.