The Public Accounts Committee has asked to be shown the legal advice supplied to the head of Campus and Stadium Ireland (CSID) after senior civil servants expressed unease at aspects of two contracts relating to the development.
Mr Barry Murphy, chairman of the Office of Public Works, which manages State property, told the committee he thought the contract awarded to the shelf company, Waterworld UK, for the running of the national aquatic centre was "instrinsically wrong".
He said the Waterworld bid should have terminated once the company created a new company, Dublin Waterworld, with new shareholders and transferred all but 5 per cent of its interests into it between the time the bid was approved and the contract was signed.
"I have never encountered a situation in all my years of dealing with contracts of various sizes where a lead bidder changed," said Mr Murphy.
"My instinct would have been that if a lead bidder changed, that would be the end of the bid, but as it transpired the legal advice was that it was in accordance with EU rules."
This had opened the OPW's eyes, he said, and they were now ensuring all contracts had clauses which stated a bid would fall if the main bidder changed.
"I'm not saying it wasn't legal. If there was legal advice around it, fine. But there are people doing business with us, and I would not like them to think we do business in that way," Mr Murphy said.
"It simply is not possible to deal with a 95 per cent transfer from one firm to another and then deal with this new firm as if it was part of the bidding process. It clearly wasn't. We would not act in this way. We don't do business like this."
The chairman and chief executive of CSID, Mr Paddy Teahon, said he had acted at all times in accordance with the advice of CSID's solicitors, McCann Fitzgerald.
The committee chairman, Mr Michael Finucane TD, asked for the written advice to be provided to the committee before it sat again next Tuesday.
Mr Murphy was also critical of the decision to use a multi-purpose contract for the design, building, financing, operation and maintenance of the national aquatic centre. It was not normal and not appropriate, he said.
He preferred simpler contracts for the design and building, with separate leasing and maintenance arrangements.
The head of the public-private partnership unit at the Department of Finance, Mr Eamonn Kearns, said the contract was not consistent with the normal public-private model used.
Mr Murphy and the Comptroller and Auditor General, Mr John Purcell, said they had not realised that the second contract under examination, to Magahy and Co for executive services to the overall CSID project, could have been awarded without first agreeing a price.
Mr Murphy said this was an old practice which the OPW had had "quite a battle" to change.
Mr Teahon said it was also a surprise to him, but the legal advice had assured him it was so.