Citing concerns expressed by the Institute of Fiscal Studies (IFS) in London, the UK's Sunday Times reported that: 'the scale of error in the [FF/PD] government's econimc forecasting in recent years is unprecedented. Predictions about the exchequer's deficit have erred by as much as 5%, compared with an average margin of error of 1.5% in Ireland in the 1990s and 1.2% or less in Britain.'

The newspaper went on to suggest that the high level of inaccuracy may have been caused by cuts in rates and unprecedented changes to the tax system, and added: 'The repeated errors call into question the state's financial model, which many economists now claim needs to be overhauled,'

The Times further revealed that: 'The Economic and Social Research Institute (ESRI) is set to call on Charlie McCreevy...to abstain from introducing any "new ideas" in December's budget to give the Revenue Commissioners and the finance department time to rebuild their systems.'

However, in a statement released at the weekend, Mr McCreevy defended himself and the government from charges of deception, arguing repeatedly that various pre-election statements had drawn attention to the fact that 'more difficult waters' lay ahead for the Republic economically, and that Budget targets would only be met if the economy continued to show strong growth.

'The facts of the matter are that, prior to May 17, neither I nor the government had information that showed Budget targets would not be met...When I got the information on the May returns in early June I took steps to remedy the situation and reported to the government on June 10.'

'I apologise if I have laboured the point, but I do so only to dispel the suggestion that, given the comprehensive nature of the memo presented to the Government in June, either I or my department were in receipt of information which I chose to keep from the Irish public in an effort to deceive them in the run-up to the Election,' Mr McCreevy concluded.