The Minister of State for the Environment last night "utterly rejected" the "allegations and insinuations" about his motives in deciding on a social housing scheme in Carlow town.
The controversy arose after Mr Robert Molloy decided against funding for 26 houses in a public scheme at Shaw Park, although the previous government had given it the go-ahead.
Opposition deputies accused him of cronyism because the PDs chairman, Senator Jim Gibbons, whose home is near the park, objected to the scheme.
Mr John Browne (FG, Carlow-Kilkenny) said Mr Molloy's action was "an insult to democracy". The Minister had overruled the democratic decisions of a local authority and the Department of the Environment. "It was gross interference by a Minister in something that didn't really concern him at all."
Mr Molloy had said he was concerned about the choice of an existing public park as a site for housing, but Mr Browne rejected this. This was not about preserving open spaces but about overruling democratic decisions.
Mr Molloy said he told the local authority that he was reluctant to make public funds available to provide housing in Shaw Park. His only reservation related to the choice of an existing public park as a site for a housing scheme.
Last Friday Department officials visited Carlow and met the county manager, the town clerk and representatives of the Carlow Friendly Co-operative Society to explore the options, he said.
"The members of the Co-operative Society made a very convincing presentation of their case to have the new housing proceed at Shaw Park," Mr Molloy said.
"In these circumstances, I decided to give the go-ahead to the two housing schemes at Shaw Park . . .
"My position on this issue is a valid one," he said. "It is motivated by a strong belief that the preservation of amenities should . . . not be overtaken by development pressures, even the provision of desirable social housing."
Mr Brendan Howlin (Lab, Wexford) said the issue went "to the root of our democratic systems and the requirement for openness". He added that the last time the PDs had any responsibility for public housing in the State, the building of public housing virtually stopped.