HOUSEHOLDERS face the prospect of steadily increasing water charges once a metering system is introduced.
The Department of Finance has already proposed an interim charge of €175 per annum, which would yield €200m for the Government.
But Environment Minister John Gormley yesterday raised the possibility that the final bill for householders could be substantially higher, after he revealed he ultimately hopes to raise €1bn.
A Department of Finance briefing document prepared for An Bord Snip last summer said a flat-rate charge of €175 per house would bring in €200m even before metering starts.
But a spokesman for Mr Gormley last night stressed that the €1bn was an ultimate aim and would not be gathered from the beginning of the scheme.
Fianna Fail and the Green Party have agreed to bring in water charges and Mr Gormley favours giving houses an allocation of free water and then charging if they exceed it.
His spokesman said the €1bn would be taken from both commercial and residential water metering, ruling out the prospect of a €900-a-year charge for householders.
It is estimated that each home could end up being billed between €300 and €400 a year in water charges.
In the next few weeks, Mr Gormley will present a memo to the Government on the proposed metering of 1.2 million homes, which is due to begin next year. But officials say this memo will primarily deal with metering and would not go into detail on the amount of money householders may have to pay.
It is hoped the roll-out will begin next year to meet the full cost of providing treated, clean drinking water to every home.
Mr Gormley yesterday announced €300m in funding to upgrade the country's water supplies over the next three years.
He said the record repair bill would see burst pipes and old mains systems replaced as some regions were losing half of their water supply through leaks. The problem is particularly serious in areas such as Roscommon, where 58.6pc of water is lost.
Mr Gormley said the problem of water loss was unacceptable and had to be addressed. He described the decision to scrap water charges in 1997 as "nonsensical and pretty spineless".
He said water metering was essential to create a fair system that would bring in significant water savings.
The Department of the Environment said average savings of 16pc per household could be achieved after meters have been installed.
Meanwhile, parts of Dublin and Clare are still without normal supplies after the big freeze damaged ageing water pipes.
"We are playing a huge game of catch-up with our water infrastructure, following decades of under-investment," Mr Gormley said.
The €300m allocated for repairs is not new money but has been redirected from elsewhere in the Department of Environment budget to ease pressure on the supply network.
"The difficulties experienced by thousands of householders across the country show clearly there are still huge issues with our water infrastructure and consumption of water," Mr Gormley said.
"Our approach to drinking water in Ireland has been unsustainable, and we must change that approach."