Irish Water will become increasingly dependent on State funding in the coming months when income from domestic water charges ceases, as called for under the agreement between Fine Gael-Fianna Fáil.

Company sources said there was a line of credit available to Irish Water to draw down from the exchequer following State guarantees to underwrite its €7.5 billion business plan, which runs until 2021.

Fianna Fáil has confirmed that the Irish Water business plan will continue. It insists that the new arrangements to be put in place under the agreement with Fine Gael will provide for greater oversight and accountability.

According to the draft agreement, parts of which have been seen by The Irish Times, an "external advisory body" will be set up to "build public confidence" in Irish Water. It will pay particular attention to the company's "procurement, remuneration and staffing policies".

A Fianna Fáil source said the agreement between the parties would “put manners on Irish Water”.

It is apparent that Fianna Fáil did not get everything it sought in the negotiations with Fine Gael on water.

The first line of the section on water in the draft agreement between the two parties confirms that Irish Water “will be retained as a single national utility in public ownership, responsible for the delivery of water and wastewater services”.

Changes

It is also understood that a proposed change in the status of Irish Water – from a commercial State company to a State agency – will not now happen, and the proposed commission on the future of water charges will not result in any change to the status or governance of Irish Water.

Fine Gael sources said this was what they most sought to preserve in the discussions with Fianna Fáil on the future of the utility and the water charges.

Having secured a suspension of domestic water charges, Fianna Fáil negotiators conceded on this point.

A spokesman for Irish Water said the company would wait for a definitive outcome of the process of government formation before assessing the consequences, but confirmed it was likely to become more reliant on the exchequer.

Decisions

“No final policy change resulting from the political talks has been conveyed to Irish Water,” a statement issued by the company said.

“When we are informed by government of any policy decisions that affect Irish Water or water charges we will assess the implications of those decisions for our operations.”

Meanwhile, Fianna Fáil leader Micheál Martin has hit back at deputy Labour leader and acting environment minister Alan Kelly for his comments last week and at the weekend in a newspaper article.

Mr Kelly accused Fianna Fáil of “environmental treason” in an impassioned Dáil speech on the suspension of the charges.

He was also scathing about Fine Gael in an article for the Sunday Independent.

Speaking at a Fianna Fáil event in Tipperary, Mr Martin described Mr Kelly as "a Tipperary politician not known for his reserve or modesty", and said it was not treason to seek "to end out-of-control practices of a commercial State company".

“If they think it is treason to set out a policy, cost it, secure overwhelming public support for it, and then try to implement it, then it says a lot about the state of the Labour Party,” Mr Martin said.