Businessman Declan Ganley has launched a campaign against the stability treaty because it does not deliver a deal on Ireland's bank debt.
The Libertas founder, who lead the No vote in the first Lisbon Treaty, said the referendum was an insult to the intelligence of the people of Ireland.
As a poll revealed a rise in support for the Yes side, Mr Ganley accused the Government of making empty threats about Ireland not being able to raise funds on the markets.
Fine Gael described his approach as flawed.
Agriculture Minister Simon Coveney, director of elections, said rejecting the treaty would damage Ireland's capacity to secure better terms on bank debt, rather than having the opposite effect.
"The approach that Declan Ganley is proposing would result in a double negative for Ireland: weakening our negotiating capacity on other issues and rejecting a Stability Treaty that is good for Ireland's future," he said.
"Mr Ganley's idea that we would choose to reject the Stability Treaty, damaging our own economy in the process, as a negotiating tactic, is flawed thinking". Mr Ganley, whose political party is now a think tank, failed to become an MEP in 2009.
He said Ireland has no moral duty to be burdened with the failed debts of risk takers, including some large German, French and British financial institutions.
"It is an abrogation of all of the rules of capitalism and it is the most exploitative exercise in corporate welfare in the history of the world," he wrote in the Sunday Business Post.
"It is beyond unacceptable that anyone would even consider asking Ireland to pass a treaty that does not cut this bank debt burden.
"Expecting Irish ratification of such a patently bad deal was an insult to the intelligence and common sense of the people of Ireland."
A Red C poll in the newspaper also revealed 53% of the electorate plan to vote Yes to the Fiscal Stability Treaty on May 31, while 31% voting No and 16% still undecided.
When undecided voters are excluded, the Yes side leads by 63% to 73%.
Tanaiste Eamon Gilmore gave a cautious welcome to the poll, adding that Government was mindful of the lessons of past elections and would continue to campaign up until polling day.
However Sinn Fein's Mary Lou McDonald said it is all to play for in the coming weeks as the electorate was only beginning to engage with the debate.
"Sinn Fein will continue to put forward the case for an alternative to austerity and an alternative to the Austerity Treaty," she said.
"Four years of austerity has demonstrated one thing, that you cannot cut your way out of a recession.
"We need investment in jobs and growth."