Northern Ireland's Justice Minister David Ford has said the British government, not the Stormont power-sharing administration, must pay for the investigation into the activities of the IRA informer, codenamed Stakeknife, who is linked to more than 20 murders.
The chief constable of the PSNI accepts that a team of police officers from outside Northern Ireland should carry out the investigation.
Stakeknife is the codename used for the person who was a senior member of the IRA but also an informer.
He was involved in the IRA's internal security unit and is linked to over 20 murders during the 1980s and 1990s.
The man at the centre of the allegations is still alive.
Three months ago Northern Ireland's Director of Public Prosecutions called for the police to investigate Stakeknife's activities, including what was known by M15 and the RUC's special branch.
Families who lost loved ones do not want the PSNI to be involved and have called for detectives from outside Northern Ireland to take charge.
The chief constable is open to this option but now the focus is on who will pay the bill for an investigation that could last years and cost over £20m.
Mr Ford told RTÉ News the British government must pay for the investigation.
He said the Northern Ireland Justice Department does not have the resources to fund the investigation and said he has made this clear to the Secretary of State for Northern Ireland, Theresa Villiers.
Recently, the PSNI)said it wanted to bring in detectives and staff from other UK police forces to investigate the activities of Stakeknife, given the size, scale and complexity of any investigation.
"Such an option would contribute towards community confidence and reduce the impact on the organisation's ability to provide a policing service today," the force said.
The investigation is expected to be one of the largest ever conducted in Northern Ireland into the activities of a single individual and could cost millions of pounds.
Former Met Police commissioner Lord Stevens led three government investigations into security force collusion.
Relatives of the victims have pressed for a fourth more comprehensive and independent probe or public inquiry.
Frank Mulhern, whose IRA member son Joe was discovered in 1993 in a ditch near the border in Co Tyrone, with his body riddled by bullets, has said there needed to be an independent investigation by an international police force.
Northern Ireland's Director of Public Prosecutions, Barra McGrory, requested two separate investigations, a probe of broad scope, seeking to examine the full range of potential offences that may have been committed by Stakeknife.
It will also include an investigation into any potential criminal activity that may have been carried out by security service agents, the senior law officer said.
