The Government proceeded with the Budget's controversial back-to-work tax plan despite opposition from a committee of the State's most senior civil servants and political advisers.
The Tax Strategy Group concluded that the proposal to individualise tax bands was at variance with Government policy to re-focus tax and welfare systems in favour of the family unit.
Papers obtained by The Irish Times under the Freedom of Information Act also revealed that the group specifically warned it would be "very difficult to generate a public consensus, which would be necessary for any such radical change".
The disclosures raise further questions about why the Minister for Finance, Mr McCreevy, went ahead with his controversial measures, which generated unprecedented opposition from Fianna Fail TDs, women's and other groups across the State.
As early as October 5th, the concept was described by the group as not being a priority given the "fundamental tax and constitutional issues involved". The subject of individualisation was not brought up again at any meeting before the Budget.
Meetings were attended by the Taoiseach's two most senior advisers, Mr Martin Mansergh and Mr Gerry Hickey; the secretary-general to the Government, Mr Dermot McCarthy, who was then assistant secretary to Government; a large number of Finance officials headed by second secretary Mr Michael Tutty, and the chairman of the Revenue Commissioners, Mr Dermot Quigley.
Two of the Tanaiste's most senior advisers, Ms Katherine Bulbulia and Mr Maurice Roche, also attended, as well as the secretary of the Department of Enterprise, Trade and Employment, Mr Paul Haran. The special adviser to the Minister for Social, Community and Family Affairs, Mr Mel Cousins, attended along with assistant secretary Mr Tom Mulherin.
One of the main focuses of the working group was to direct resources at families with children. However, the group could not reach agreement on how to do this.
The group commissioned the Economic and Social Research Institute to examine three options, including increasing child benefit by £32.50 a month per child, which would have transferred gains from couples without children to those with children and would have had most benefit for those in the lower half of the income distribution scale.
Another option was child benefit increases of £16.50 a child, along with a special £30-a-week allowance for stay-at-home parents, and special investment in pre-schooling for children up to three years.
This also focused gains on families with children and those lower down the income table. However, it gave rise to more losers than winners.
The third option, which eventually formed the basis of the Budget, was to use the money to fund tax cuts generally. This was found to result in a major redistribution from couples to single people without children and to dual-earner couples with and without children.
In very stark language, the report warned that losers outnumbered winners among one-income couples.
"The resources raised would not be targeted towards families with children and, as such, this approach would be at variance with Government policy to refocus tax and social welfare in favour of the family unit," it warned in no uncertain terms.
Nevertheless, the Taoiseach, the Tanaiste and the Minister for Finance decided to proceed with the measure and make it the backbone of the Budget.
The group also warned that cutting both the standard and top rates of tax by two percentage points - which the Budget went on to do - was of most benefit to higher taxpayers and would have limited impact on removing people from the tax net and reducing the numbers of taxpayers on the higher rate.
At its final meeting two weeks before the Budget on November 16th, the group recommended cutting one percentage point off the standard and top rates of tax and using the savings to widen the standard rate tax band.