Minister for Transport Paschal Donohoe has rejected claims that he is "softening up" public opinion away from substantial investment in heavy rail, before he announces his transport capital plan next week.

Mr Donohoe insisted that the National Transport Authority (NTA) had re-evaluated its business plan because it was based on economic circumstances a decade ago.

He said they had to develop a project that was affordable and suitable for transport needs.

The Government on Tuesday decided to defer plans for a Dart underground system and indications were given for a revised metro system between Dublin city centre and the airport and Swords in North county Dublin.

Fianna Fáil transport spokesman Timmy Dooley said "there does appear to be a softening up of public opinion away from a serious investment in the heavy rail option, better known as Metro North and providing a comprehensive solution to the needs of commuters".

He said the web summit was being lost to Lisbon for the next three years. “These are the kind of decisions that get taken on the back of poor infrastructure and the lack of Government commitment to invest in same.

“So we can see the repercussions already Minister from this delay in dealing with a critical piece of missing infrastructure that would have such a significant benefit.”

Mr Donohoe said there was conjecture about what would be the option for the northside of the city. He said he had not given an indication to anybody of what that plan will be because he had not brought it to Cabinet and he would only make an announcement regarding the plan when he had secured Cabinet approval.

But the Minister said of the “so-called bad news of yesterday”, that if the Metro North project were to happen in its current format it would cost €4 billion of taxpayers’ money.

“Not only would it would be the largest transport project ever undertaken in the history of the State. By some order of magnitude it would be the largest project our country has ever undertaken.”

He said “the business assumptions that underpin that project are from a decade ago and I have a responsibility to look at the project in the light of where we are now, to make sure we have a project that is affordable and of the right scale to meet what we now know the economy will look like in a decade’s time”.

But Social Democrats TD Catherine Murphy pointed out that “the biggest investment in the country in the 19th century was the railway and we are stilling seeing that benefit. We have got to think in the long-term.”

She said the Dublin area’s population was expected to go grow by about 400,000 up to 2030. There are more people living in Dublin city and county than in all of Munster since the last census and we’re constantly adding to the size of the city” without providing adequate infrastructure.

She said there was a fire last week at the port tunnel and “the entire city closed down because we don’t have the alternative” route. She said these problems were not all on Mr Donohoe’s watch “because this has been going on for a long time but it is being postponed again”.

Mr Donohoe said that investment was underway. More money in the last 18 months had been found for Bus Eireann and Dublin Bus and public service obligation funding was unchanged this year for the first time in six years.

The Minister asked Ms Murphy: “Where would you find the €4 billion to fund that project?”