The Taoiseach Enda Kenny has said the Government will be able to take Irish Water off its books - despite concerns expressed by the European Commission.
A Commission report has stated it is unclear whether or not the utility will be able to borrow money independently. It would be a serious risk to the State's finances if Irish Water was to fail independent tests scheduled in April.
The report also calls on the Government to take "decisive" action to address economic "imbalances" - including unemployment and debt levels.
Kenny added the coalition is managing the recovery and noted Irish Water's funding model is secure.
“The Government have listened very carefully to the concerns of people around the country,” said the Taoiseach.
“We have introduced a rate of charge which is very fair and that also includes the opportunity to satisfy the terms of the market test – which we expect we’ll measure up to in that regard.”