The Independent Alliance has dropped its controversial ‘granny grant’ proposal, admitting in a secret briefing document that it has been “shot down” in the budget talks.

The proposed €500 annual payment for grandparents who care for their grandchildren caused controversy when it was mooted by Minister Shane Ross over the summer. Concerns were raised about how much a non-means-tested grant would cost the exchequer.

A document, marked ‘strictly confidential’ and prepared...