The European Commission has said it will write to Dublin City Council and ask it to examine claims of a potential conflict of interest in relation to the €300m Poolbeg incinerator project.
According to documents seen by RTÉ's This Week, the EU Commission has indicated it will ask the council to examine a number of questions.
Some of these relate to the role played by a senior manager who worked for a company hired to advise the City Council on the project, who later joined the company which successfully bid to design, build and operate the facility.
In a letter written last week, the Commission said that this matter should be "investigated by the national competent authorities" in Ireland.
The commission document goes on to say that it "intends to call the attention of the Irish authorities to the need to provide adequate follow-up on this matter and to inform the Commission of the outcome of their actions".
The letter was written in reply to a complaint made by two south Dublin residents, Joe McCarthy and Valerie Jennings.
Responding to the claim on 7 February, the Commission rejected a number of other claims in relation to procurement and contracts.
Dublin City Council declined to comment on the Commission's statement regarding the alleged conflict of interest.
However, the correspondence from the Commission mentions that the local authority said it does not believe that any conflict of interest arose in relation to the senior manager's separate roles with both companies.
The claim centres around a senior manager who worked with a specialist engineering company called COWI, which was one of two companies hired by Dublin City Council in 2001 to advise them on how best to proceed with the Poolbeg incinerator project.
The senior manager left COWI one year later and took up a high-ranking role with the Danish company Elsam - just months before Elsam bid for the contract to design, build and operate the Poolbeg incinerator.
Elsam's bid was successful. The company later merged with another Danish firm, whose interest in the project was acquired by US firm Covanta.
The EU Commission does not say it agrees with the allegation but it says that it will be asking the council to examine the issue and report back to Brussels.
RTÉ's This Week understands that this issue was previously brought to Dublin City Council's attention by the Green Party, back in 2004, when Elsam was one of two short-listed bidders for the Poolbeg facility but before they ultimately won the contract.
It was also considered by the Department of Environment one year later. Both were given assurances at the time that no conflict arose.
According to correspondence at the time, COWI said that the senior manager in question had only a "peripheral knowledge" but no direct involvement in the company's work relating to the Poolbeg incinerator, although the company said that he did host a dinner for the team which was advising the council, when the team visited Copenhagen.