Junior Finance Minister Michael D'Arcy was accused of dropping a bombshell after he appeared to suggest that plans for a special Garda unit to tackle insurance fraud have been abandoned.
Mr D'Arcy told the Oireachtas Finance Committee the setting up of the new unit could mean gardaí being pulled from tackling crime. This is despite the proposal involving the fraud unit being funded by insurers.
The Alliance for Insurance Reform accused the minister of abdicating responsibility for a cornerstone of his own reforms.
Politicians have accused Mr D'Arcy, who is in charge of insurance reform, of failing to grasp the gravity of the insurance crisis.
The Government's Cost of Insurance Working Group taskforce proposed a year-and-a-half ago that a special unit be set up to specialise in tackling insurance fraud.
The proposal is to set up a counter-fraud unit modelled on the UK's industry-funded Insurance Fraud Enforcement Department at the City of London Police.
Mr D'Arcy told the committee: "It is a matter for the gardaí. We don't want to take gardaí away from fighting crime to tackle fraud. Personally, I'm in two minds, but my opinion doesn't matter. It is up to the Garda commissioner."
The Alliance for Insurance Reform reacted angrily, saying Mr D'Arcy's comments meant the fraud unit proposal had been effectively abandoned by the Government's Cost of Insurance Working Group.
Peter Boland, of the Alliance, said: "This is a bombshell. Why has the working group been working on it for 18 months if it is now going to be shelved?
"The minister is abdicating responsibility for a cornerstone of his own reforms," he said.