A major row on class has erupted in the heart of government over plans to build thousands of social and affordable houses across the country.

At a heated Cabinet meeting last Wednesday, Independent Alliance Minister Finian McGrath accused Fine Gael ministers of having a "mindset" which is opposed to delivering social and affordable housing.

Mr McGrath told Fine Gael Cabinet colleagues they need to "stop looking down their noses" at social housing as it was having an impact across society and painting a negative image of people living in council houses.

Mr McGrath's comments sparked a furious reaction from his Fine Gael colleagues who insisted the party had no objection to social housing.

Taoiseach Leo Varadkar was the first to hit back at the Independent minister and told him it was "untrue and unfair" to say Fine Gael was opposed to the development of social housing.

Rural Affairs Minister Michael Ring angrily told Mr McGrath he was "proud" to have been born and raised in a council house in Westport, Co Mayo.

However, Mr Ring also warned that the Government's new land agency should prioritise delivering houses for working people on low incomes rather than providing new homes for those "who never work and never will work".

Social Protection Minister Regina Doherty also took deep offence to Mr McGrath's comments and reminded him she was born and raised in Ballymun, in north Dublin.

Ms Doherty told Mr McGrath he should not make "sweeping and unqualified statements" about other ministers.

"There was blood on the Cabinet floor once Finian decided to have a go at us over social housing," a Fine Gael Cabinet minister said.

The row was sparked during a debate on the introduction of a mammoth new State land agency which the Government hopes will deliver 150,000 new homes in the next 20 years.

The Land Development Agency (LDA) will acquire a massive land portfolio by using its €1.25bn budget to buy up State-owned and privately held sites.

Under the plans agreed by Cabinet last week, 40pc of all developments delivered by the agency must be social (10pc) and affordable housing (30pc).

However, the powerful new body has sparked serious concerns within Government and is causing divisions among ministers.

One senior Government source yesterday said the agency had the "potential to become another Irish Water".

Housing Minister Eoghan Murphy, who is facing a vote of no confidence when the Dail returns, has staked his reputation on the agency.

At the launch of the LDA, the Taoiseach said its introduction "will be as significant as the decision to set up ESB or Aer Lingus".

However, one senior Fine Gael minister yesterday said the Government's housing strategy was "dangerous" and could lead to the development of ghettos across the country.

"If we keep continuing the way we are, we are going build ghettos, because we are housing all these people who not employed and will never be employed because they don't want to be employed," the minister said.

"We used to build houses for working people but now it's all people with no income in the one area. There needs to be mix of people in housing estates so we can bring working people with us," the minister added.

Another minister said there were "more holes in Murphy's plan than there are houses being built".

Ministers were also increasingly worried over the costs of establishing the new agency.

In the memo he brought to Cabinet, Mr Murphy said the agency will need to offer enticing employment terms to ensure they can attract the level of expertise needed to deliver the objectives set out in his plan.

"The LDA will require flexibility on terms and conditions of employment in order to attract and retain the necessary skillset," it said.

One senior Government source said: "You are looking at paying top dollar to get in all these experts and it will be an Irish Water set-up with big salaries and bonuses."

Transport Minister Shane Ross snubbed the launch of the LDA in Department of Social Protection last Thursday, due to concerns he has about the new agency. Land held by the Department of Transport will be central to the LDA's development plans.

Mr Ross recently wrote to every agency under his remit asking them to set out their land portfolios.

However, it is understood Mr Ross does not believe a new State agency is needed to develop new houses.

Sunday Independent