Health Service Executive officials believe they were "duped" by the Leas Cross nursing home about improving standards there, according to Taoiseach Bertie Ahern.
Mr Ahern also insisted that new inspectorate legislation would be introduced in the autumn and not before the summer recess, despite Opposition demands.
He said that the Swords nursing home would pay for the improvements agreed on Tuesday with the HSE, which has effectively taken over the running of the north Dublin home.
Mr Ahern told the Dáil that the HSE thought it had been making progress in addressing problems and complaints about Leas Cross.
However, in the wake of the RTÉ Prime Time Investigates documentary, officials now believed that what they were told "was not followed through and the systematic abuses we saw the other night were issues that they did not think happened".
Labour leader Pat Rabbitte said, however, that that was "not exactly much of a defence" and called for the publication of a report into the circumstances of the death of one of the residents of the home.
"That report was in the possession of the people who are now proclaiming to be shocked."
For the second day running the controversy over the standards of care at the nursing home dominated Dáil proceedings.
Fine Gael leader Enda Kenny demanded the introduction, before the summer recess, of legislation to create a new independent inspectorate with power to close nursing homes where standards were inadequate. He said promises were made in 2001 to introduce such legislation and to implement recommendations on elderly abuse, but these promises had not been fulfilled.
"Last December the Tánaiste rushed through legislation to deal with illegal charges for long-stay beds. The Government should show the same urgency in drafting legislation to protect elderly people as it did in attempting to take 80 per cent of their pension payments."
Mr Kenny also hit out at the "appalling inadequacy" of the inspection regime and questioned why advance notice of inspections was given. "That's like giving the questions to Leaving Cert students next week."
Mr Ahern said that in most cases, nursing homes were not given advance notice of inspections, but such notice was given for "the first call to the institution" to talk to managers and owners. When he said that it was because they wanted to inspect the insurance, fire certificate, accounts and all other relevant issues, there were repeated interruptions from the Opposition. Bernard Allen (FG, Cork North-Central) said "they never go back again. Figures show that."
Mr Rabbitte called for the publication of the report on the case of a resident of the home, Peter McKenna, who "died in awful and painful circumstances, which I will not describe, in Leas Cross".
The report of the investigation by Martin Hynes, former chief executive of the Irish Blood Transfusion Service, was finished a couple of months ago, Mr Rabbitte said.
"How can the Taoiseach say that the HSE thought it was solving these problems and how can the HSE go on television and state that it was as shocked as the rest of us and taken by surprise at the extent of the problems portrayed at Leas Cross?
"How can they say that when they have the Hynes report?"
