The Taoiseach did not rule out the provision of a metro transport system in Dublin even if the two city centre Luas lines were to be linked.
Mr Ahern said that the Railway Procurement Agency had recently considered a preliminary analysis of the feasibility of linking the two lines at a cost of €70 million.
"The indications are positive that joining the Luas lines does not rule out the case for either a metro or the rail lines, which was the case stated five or six years ago. It could be delivered in a period of 18 to 24 months from getting approval to proceed following a planning inquiry."
The Labour leader, Mr Pat Rabbitte, suggested that it was clear from the Taoiseach's remarks that the metro project was dead.
"From his reply, I take it that what was rejected as a bad idea in 1998 is now deemed to be a good idea that does not cut off any options for the future."
He said that the project could have been undertaken at minimal extra cost contemporaneous with the works already put in place. "In the context of the overall cost of the Luas proposal at the time, a cost of €70 million would not have been a significant add-on."
Mr Ahern said he could remember the Labour party protesting when a former minister, Senator Mary O'Rourke, and himself, launched Luas and stated that it would be operational by 2004.
"That has now been done."
He added that while some members of the House might think that Luas was built without expense, the two completed elements of it cost €650 million.
"Some years ago, it was believed that the link would rule out other issues. A new plan, which is good, has been submitted by Iarnród Éireann. It is not a question of just dropping the concept of delivering a metro but doing it within a realistic cost. Dublin city cannot take up the entire transport infrastructure budget for Ireland.
"We must look at the best, most efficient and effective ways of delivering good transport services. The Government is doing this through roads, rail, the electrification of the Maynooth line and examining the linking of the two Luas lines."
Earlier, Mr Rabbitte said that the Minister for Transport, Mr Cullen, had announced he intended bringing proposals to Cabinet by Christmas for a spur Luas line from the green line at St Stephen's Green to the red line at O'Connell Street or Middle Abbey Street.
He added that the Taoiseach should reflect on Mrs O'Rourke's decision in 1997 "to suffer the loss of €114 million in EU funding at the time to commission a new report by W.S. Atkins, which, in April 1998, recommended precisely such an overground link".
He added that in May 1998, Mrs O'Rourke rejected the Atkins proposition for a surface connection in favour of an underground link. "If it was wrong in 1998, why is it right in 2004?" Mr Ahern said the original Luas proposal for Dublin some six years ago was for a single Luas line from Tallaght via the city centre to Sandyford.
The subsequent decision, as far back as 1998, was to separate the proposal into two elements: Sandyford to St Stephen's Green and Tallaght to Connolly station, with a link to the airport to follow later.
"There has been a number of developments since these decisions were taken."