Opposition deputies have accused the Minister for Finance, Mr McCreevy, of doing "serious damage" to Ireland's ability to attract foreign investment because of his attitude to corporation tax. Fine Gael's finance spokesman, Mr Michael Noonan, said the Minister had "seriously bungled" in discussions in Brussels on corporation tax.

The government was accused of making election promises to reduce corporation tax to 10 per cent but once in Government, looking for the agreement of the European Commission for a 12 1/2 per cent rate.

The criticism emerged as the largest single piece of legislation in the history of the State was introduced in the Dail. The Taxes Consolidation Bill integrates existing tax law which has grown annually over the past 30 years.

At the same time the new Bill, which contains 1,104 sections and 32 schedules, still cuts existing direct taxation legislation in half. It had grown because of changes in the tax code and annual amendments after the Budget.

Introducing the Bill, the Minister of State for Finance, Mr Martin Cullen, said the Government intended to introduce a single low rate of corporation tax for trading profits with a higher rate of tax for non-trading profits.

Mr Noonan said, however, that Mr McCreevy was "particularly foolish" to re-open the corporation tax debate when the previous government had got the European Commission to accept the 12 1/2 per cent rate.

Mr Derek McDowell (Lab, Dublin North-Central) said Mr McCreevy had damaged prospects for attracting foreign investors.

Mr Pat Rabbitte, Democratic Left's spokesman on finance, called on Mr McCreevy to "take his courage in his hands" and target tax relief at low to middle income earners.

Earlier, the Fine Gael leader accused the Taoiseach of doing a U-turn on the rate of corporation tax to apply to the International Financial Services Centre (IFSC) amid sharp exchanges.

Mr John Bruton challenged Mr Ahern to explain why the Government had abandoned its explicit commitment, both in its joint programme and in Fianna Fail's pre-election manifesto, to have a 10 per cent corporation tax rate for the IFSC after 2012.

Mr Ahern said taxation was a matter for the Minister for Finance. "The Government has followed what was already agreed that there would be a single rate of corporation tax. As the Minister stated here last week, it is a matter that he is finalising. As you know, both himself and the Tanaiste have meetings in Brussels today, and he will issue his policy statement on it during the course of the Budget debate."