The Minister for Justice has cancelled plans to build a detention centre for young offenders at Newlands Cross in Dublin, following an intervention by the leader of his party, the Tánaiste Ms Harney.
Mr McDowell was also advised to do so by party colleagues and Minister of State at the Office of Public Works, Mr Tom Parlon.
The prison, which would have accommodated 80 boys and 20 girls aged 16 and 17, was to be built at the site in the Tánaiste's Dublin Mid-West constituency.
A prison dedicated to offenders aged 16 to 17, is required under the 2001 Children's Act. Currently young male offenders are sent to St Patrick's Institution which caters for 16- to 21-year-olds. Young female offenders are sent to Mountjoy women's prison.
The Children's District Courts had to strike out a record number of cases last year as there were no appropriate places of detention to send young offenders. The numbers had jumped from 34 to 133 over 12 months. The preparatory process for the prison had reached the final stages necessary before beginning actual construction on the site off the N7.
A spokeswoman for OPW said it had received observations and objections from Dúchas, local councillors, residents' associations and Oireachtas members.
In a letter to constituents Ms Harney said she "strongly opposed the plan and made strong representations to my party colleagues, Minister Michael McDowell and Minister Tom Parlon and impressed upon then the genuine concerns of the local community. I am pleased that these representations were taken on board and that the proposal has been dropped."
A spokesman for Ms Harney said that as there were already two detention centres - at Wheatfield and Clover Hill - in the constituency to build another there would be "bad planning".
Ms Harney's constituency rivals, Mr Paul Gogarty, TD, of the Green Party and Fianna Fáil TD Mr John Curran also objected to the proposed prison on environmental grounds.
The Labour party spokesman Mr Joe Costello said cancellation of the prison was "clearly a case of one wing of the PDs proposing and another wing saying, 'not in my back yard'".
A spokesman for the Prison Service said: "It isn't easy to build a prison, but we now begin the process over again and start looking elsewhere. He said a non-refundable legal down-payment had been made on the site.