Officials in the Department of Finance opposed the move to get rid of special stamp duty rates making it more expensive for investors to buy residential property.

Documents released under the Freedom of Information Act show that the decision of the Minister for Finance to change the stamp duty regime by way of an amendment to the Finance Bill once it had already started to make its way through the Oireachtas, was against departmental advice.

In a memo prepared last February, Mr McCreevy's officials wrote: "If the level of representations made to you on the 9 per cent investor stamp duty is anything to go by, then this tax is having the desired effect."

They said there was also concrete evidence it was working, including an increase in grants to first-time buyers, a slower rate of growth in house prices and more lending to first-time buyers.

The official argued that this indicated the regime should be continued and also that measures already flagged in the Bill "sent a clear signal" that the 9 per cent rate would be retained.

"Moreover, the removal - so soon after its introduction - of the investor rate could be seen as a volte-face indicating failure or lack of belief in the Government's own policy," Mr McCreevy was told. "For these reasons it is strongly recommended that no change in the 9 per cent stamp duty regime for investors be made," said the memo.

When Mr McCreevy commented on the late changes to the regime during the Bill's final stages in the Seanad last month, he cited the tax's "negative impact on developers and potential investors", as the reason for the change.

He said there was evidence this could have had adverse consequences for the overall housing supply and particularly for apartment developments, because reduced investor demand made apartment developments unviable.

"There is also evidence that applications are being made to local authorities for a change in planning permission from residential to commercial," he said.

Leaving the investor rate unchanged in the second-hand market while reducing it somewhat for new property, "maintains the relative advantage of first-time purchasers in the second-hand market which accounts for two thirds of first-time purchase transactions," said Mr McCreevy.

The original measures - aimed at favouring first-time buyers over investors - were brought in as part of the second Finance Act 2000 and included a flat rate of 9 per cent stamp duty on investors buying residential property.

There was also to be a 2 per cent anti-speculation tax on residential properties each year for the first three years of ownership.

The documentation released by the Department of Finance shows that apart from intensive lobbying by other ministers and fellow politicians to have the regime amended, commercial interests also sought changes.

Many of the representations were on behalf of businesses developing holiday home schemes, which were caught by the new taxes, including the St Helen's Bay Golf and Country Club in Wexford.

Among the businessmen who contacted Mr McCreevy was the prominent hotel owner from Donegal, Mr Sean McEniff, who wrote directly to the Minister seeking a meeting "as soon as possible".

It is not clear from the documents if the meeting took place but the letter was annotated: "A meeting wd [sic] appear appropriate". Mr McEniff's Tyrconnell Group has significant interests in the holiday home sector.

In the event, the 2 per cent tax was done away with through a change to the 2001 Finance Bill at committee stage, several weeks after it was originally published in mid February.

The 9 per cent flat rate on investors buying new properties was abolished but retained for second-hand properties.