The Minister for Justice, Mr McDowell, is finalising proposals for an effective deregulation of small pub and liquor licences in what will be the biggest overhaul of the licensing laws in decades.
Under legislation to be published next month, the Minister will bring forward measures to allow for the issuing of new licences for small pubs and cafés under 1,500 square feet in size.
The Irish Times has also learned that the legislation, in the form of a codification bill, will also cap the size allowed for licensed premises in an effort to stem the rise of the "superpub" phenomenon.
The legislation will streamline and simplify the current licensing application and renewal system, making it simpler for Garda authorities to take action against premises that breach terms of their licences.
It is not known how much the new, smaller pub licences will cost, but it is expected to be a fraction of the current prices. At present licences are selling for a minimum of 140,000, and more than 400 pubs in the Republic have a turnover in excess of 1.27 million.
The proposals are set to place the minister on a collision course with the licensed trade, which is already preparing for a major campaign against the proposals.
Trade representative associations are expected to argue that the proposals would lead to increased alcohol abuse by creating hundreds of new pubs.
A spokeswoman for the Minister declined to comment on the specific proposals to be made, but said Mr McDowell would be publishing details in the form of a "Heads of Bill" next month.
Two years ago Mr McDowell indicated he wanted to bring in sweeping reforms of the licensing system, which has remained virtually unchanged since the early part of the last century.
Under the current system, the Government has been unable to issue new pub licences except in exceptional circumstances.
To open up a new licensed premises, a prospective publican has to buy a licence from an existing pub, and "extinguish" it. The same also applies for hotels and off-licences, which has limited the number of licensed premises in Ireland.
Mr McDowell has, in the past, indicated his concerns about the effect of limiting licences.
He said earlier this year that the provision had undoubtedly served over the years to control the number of licensed premises. But it had not served to limit alcohol consumption and it had produced very undesirable side-effects. He said he would like to see a return to smaller licensed premises serving the needs of local communities.