Outgoing Fifa vice-president Jim Boyce has called for an investigation into the €5m given to the FAI to not contest Thierry Henry's infamous World Cup handball.
s a tumultuous week at Fifa continued, FAI chief executive John Delaney said the organisation had reached an agreement with president Sepp Blatter, not take the case to the courts.
The revelation further deepens the storm surrounding Fifa which is mired in allegations of corruption.
But FAI chief executive John Delaney insists that the €5m given for the construction of the Aviva Stadium was legitimate, and a significant boost.
"It's a very good agreement for the FAI, a very legitimate agreement for the FAI," he said.
And the FAI said it accepted Fifa's settlement offer to avoid a "long, costly and protracted legal case".
But Mr Boyce was dumbfounded by the revelations.
"How anyone can authorise a payment of €5m to stop legal proceedings is totally and utterly beyond me," said the 71-year-old.
"If this was authorised by the president of Fifa without the knowledge of the executive committee - this is something that has to be looked into. I sincerely hope that when they meet they launch a full investigation into it.
"It's just incredible and I can't believe that it's actually happened ... I've never known in my experience of football of someone giving a payment like that for a referee's mistake to stop someone taking legal action."
Fifa last night said in a statement that the payment to the FAI was a "loan", to be paid back if Ireland qualified for the 2014 World Cup.
It said the sum was written off just over five months ago on December 31, after Ireland failed to qualify for the tournament in Brazil and "in view of the FAI's financial situation".
The revelations emerged after Delaney spoke on RTÉ Radio yesterday about the aftermath of former Arsenal forward Thierry Henry's blatant handball in Ireland's crucial November 2009 qualifier. It was missed by the referee, led to a French goal, and cost a World Cup spot.
Amidst the controversy at the time, the FAI suggested Fifa add a 33rd team to the World Cup. Blatter famously mocked the suggestion, and the FAI later threatened legal action.
The €5m deal was struck less than two months after that game in January 2010.
Delaney said: "We felt we had a legal case against FIFA because of how the World Cup hadn't worked out for us with the Henry handball. Also the way Blatter behaved if you remember on stage when he had a snigger and a laugh at us.
"That day when I went into him and told him how I felt about him, there were some expletives used, we came to an agreement."
Fifa released the statement after Delaney's remarks, confirming the payment was €5m.
Last night an FAI statement said: "The Association accepted Fifa's settlement offer to avoid a long, costly and protracted legal case. The offer given to the Association was fully written off by Fifa in 2014.
"Fifa's settlement with the Association has at no time influenced the FAI's criticism of Fifa, as demonstrated by our consistent criticisms of Sepp Blatter. Furthermore, the settlement was made without any conditions other than confidentiality."