Green Party TD Paul Gogarty suggested the Irish Sports Council was engaged in a "morally bankrupt and corrupt practice" through its involvement with a commercial company.
Mr Gogarty referred to the council's involvement in the Kids In Action scheme with SuperValu, the logo of which was in the scheme's advertisements.
He said it involved children collecting bundles of €10 vouchers to get equipment.
"For example, their purchase must amount to almost €4,000 for a Gaelic football worth less than €20, a basketball coaching bag requires €70,000 worth of purchasing and a so-called free indoor hurley needs €3,800 worth of shopping.
"Unfortunately this blatant commercialism and cynical use of children and teachers is legal and made more attractive by the lack of real investment in schools' physical education equipment.
"Does the Minister for Sport agree with the council endorsing a commercial scheme overtly? Is it not a morally bankrupt and corrupt practice, and what will the Minister do about it?"
Minister for Sport John O'Donoghue said the council was "neither morally bankrupt nor corrupt". It was involved, in so far as it could be, in increasing children's participation in sport, operating Buntus, which was assisted by the commercial sector.
"We are trying to increase the number of children participating in sport because society has a problem in terms of obesity and its health-related difficulties.
"While we use as much of our funding as we can, we are involved with the commercial sector where feasible through the council to achieve higher participation rates. Not for a moment do I believe the council would become involved in any corrupt or immoral practice."
Mr Gogarty said: "With all due respect, is the Minister a pimp? Is he trying to keep kids healthy by allowing a body under his remit to prostitute itself in providing equipment for them? That is what is happening.
"The reality is that the Irish Sports Council is endorsing SuperValu, a commercial company with commercial interests, by allowing its logo to be used in SuperValu's advertisements.
"Is that an immoral practice, if not a corrupt one? Is it right that a body under the remit of the Department of Arts, Sport and Tourism is endorsing a company? Is the Minister saying he endorses SuperValu because it gives a person a GAA ball worth €18 if he or she spends €4,000 in it shops?"
Mr O'Donoghue said he was neither a pimp nor a wimp.
"The Department of Arts, Sport and Tourism is involved, through the Irish Sports Council, in trying to help more children to participate in sport.
"We are using our own funding, where possible, to enable us to do this in the greater interests of society. We are also sourcing funding from the commercial sector where possible. The Irish Sports Council does this where it is appropriate to do so."
When Mr Gogarty wondered if it was ever appropriate, Mr O'Donoghue said it was most unfair of the deputy. He was surprised at him accusing the council of being amoral and corrupt. "Nothing could be further from the truth."
Mr Gogarty said the Minister should ensure that the council's logo was removed from Super-Valu's advertisements.
