Thousands face bills of up to €70,000 to repair pyrite damage to their homes after a leading building insurer refused to meet claims.
HomeBond, the building insurance agent, has contacted the owners of affected properties to tell them they will not accept liability or pay out on claims.
Some homeowners who had already been offered compensation have now been told that these offers no longer stand. Junior Minister and Meath East TD Shane McEntee, who has represented many of the affected families, described the move as "shameful".
It follows a High Court case in which it was ruled that a quarry from which pyrite-infected material was sourced was culpable for the condition of the buildings it supplied.
Last year it was estimated that around 20,000 claims had been made to HomeBond in relation to pyrite -- a mineral that expands in the presence of moisture and oxygen, leading to severe cracking and structural problems.
The company has disputed that figure, but last night declined to comment on how many people it had contacted or on the number of homeowners who had received settlement offers only to have them withdrawn at the 11th hour.
The cost of repairing affected buildings is estimated at between €50,000 and €70,000.
HomeBond referenced the High Court case between James Elliott Construction Ltd and Irish Asphalt Ltd last May as a factor in reaching its decision to refuse claims.
In that case, Mr Justice Charleton ruled that the supplier of the material was responsible for damage caused and not the developer.
"It is the view of HomeBond that the quarry suppliers of the defective hardcore infill in question acted negligently in supplying material that was not of merchantable quality and fit for purpose, and supplied a defective product," it said in a statement last night.
"Under the terms and conditions of the HomeBond agreement, HomeBond's liability for major defects is specifically excluded and accordingly, HomeBond does not propose to take any further action."
Before writing to customers, the company contacted the Department of the Environment to brief them on their position.
A departmental spokesman said that while Environment Minister Phil Hogan was aware of the problem facing homeowners it was essentially a civil matter between private parties.
Reacting angrily to the news last night, Mr McEntee said: "To go in and just hand it over (to the Government) and walk away, no they have not done the right thing.
"It's a shameful thing for them to do, shameful. The pressure this (issue) puts on marriages and then you take negative equity and mortgages."
The news will come as a blow to those who had been relying on the agency -- which provides bonds for new homes in case of structural defects -- to help meet the financial cost of righting defective homes.
It is understood that about 20 building firms had sourced materials containing pyrite from at least four quarries in Dublin and Meath.
HomeBond, which was established in 1978, describes itself as the leading provider of structural defect cover for new homes, with more than 600,000 on its books.