FAMILIES will face average bills of between €250 and €300 a year when water charges begin, cabinet ministers have been told.
Householders will get a free allowance, which will cover about half their supply, and then pay for the remainder.
The estimated charges to be levied by Irish Water followed focus group and market research, conducted by US consultants, on how far families can be pushed in paying additional taxes, the Irish Independent has learnt.
The Government is "hyper-sensitive" about a widespread political backlash against the controversial charges, senior coalition sources have said.
The clearest indication of the cost for families comes as the storm of controversy surrounding Irish Water and its €50m spend on consultants continues to rage.
Senior executives will appear before a Dail committee next week to answer questions on its set-up costs.
In a further blow to hard-pressed families, the Commission for Energy Regulation (CER) said it may allow Irish Water to increase its charge per unit for water if the demand is not as high as anticipated.
Irish Water could also increase charges if it has higher-than-anticipated costs because of unforeseen events arising from a drought or a harsh winter.
The CER said it was to hold a public consultation between April and June before it decides on a regime of charges and billing for Irish Water, after the holding of the local and European elections.
Ministers are acutely aware of the potential of a widespread backlash against the introduction of water charges, particularly as families are facing the full-year effect of the Local Property Tax this year.
Just 400,000 houses will have meters installed by the time the first bills are sent out next January, meaning over 1.2 million homes will be hit by a flat-rate charge.
Irish Water managing director John Tierney said the current cost of providing water is €500 per house.
The Irish Independent understands that the free allowance committed to by Government will account for "about half of that cost", with the Cabinet being the body to determine the level of that free allowance.
It comes as Irish Water refused to disclose how much was spent on each consultancy firm and for what purpose, despite widespread calls from several ministers and opposition TDs for it to disclose a "line by line" account of the money.
"The breakdown is commercially sensitive," a spokeswoman said.
"Utilising the specialist services and creating the appropriate operating model for Irish Water generates an enormous pay-back for the State and ultimately the Irish Water customer," the spokeswoman added.
Several ministers yesterday, including Tanaiste Eamon Gilmore, Transport Minister Leo Varadkar, Agriculture Minister Simon Coveney and Environment Minister Phil Hogan, said they expected Irish Water to provide greater answers about the €50m spend, which Mr Tierney first disclosed on the 'Today with Sean O'Rourke' programme on RTE Radio.
As a result, senior management of Irish Water have agreed to appear before a special meeting of the Committee on the Environment, Culture and the Gaeltacht on Tuesday.
The Public Accounts Committee is precluded by Irish Water's enabling legislation from bringing the agency before it. This is because it is not subject to its oversight or that of the Comptroller and Auditor General.
PAC chairman John McGuinness said he was "appalled" that the agency does not come under his committee's remit and called on the Government to introduce fresh legislation to address its accountability deficit.
But the Government is also going to have to defend the "lack of transparency" that surrounds Irish Water as Fianna Fail announced yesterday that it was tabling a private members' motion next week for greater transparency.
Mr Gilmore said he expected Irish Water to provide a full explanation to the serious questions raised.
"I expect that Irish Water will provide an explanation for the Irish people, first of all about the value for money," he said.
Mr Hogan said public concerns were understandable but setting up a company "costs money". He said the money had been spent on governance issues, billing systems, legal fees, setting up IT systems, and the setting up of service-level agreements with local authorities.
Daniel McConnell Political Correspondent