The Minister for Public Expenditure and Reform has said he and the Government are deeply concerned that documents that form part of the negotiating process with the troika surfaced in a German parliamentary committee.
Speaking on RTE's Six-One, Brendan Howlin said the Government is anxious to find the source of the document and to ensure that any correspondence, interaction or dialogue with the funding partners is kept in the confidence that it is expected to be.
Mr Howlin said no decisions have yet been taken in relation to the Budget.
He said various option papers have been circulated and various options discussed with the troika as part of any dialogue. But he added that the notion that anything had been decided was untrue.
Taoiseach Enda Kenny said tonight that no decision has been made by the Government with regard to the details of the Budget and he was not going to give validity or a factual account of what had happened with the Troika.
Speaking in Belfast, Mr Kenny said he could confirm that the Cabinet had made no firm decisions about the Budget and in the run-in to any Budget, a whole range of options is considered.
He said the Minister for Finance had made his views known about the taxation question publicly for some time and
Mr Kenny said: "I have stated before, we think it important that people are able to plan their personal lives and business lives and, in that respect, income tax is very important."
He added that as the Government has made no decision about the details of the Budget, anything outside that is speculation.
Reuters obtains 'Letter of Intent'
Documents obtained by Reuters show the Government will increase the top rate of VAT by 2% in next month's Budget and make up the rest of the €1bn it is targeting in new revenue measures through indirect taxes.
The document involved is called "Ireland: memorandum of economic and financial policies".
It was attached to a draft "Letter of Intent" from Finance Minister Michael Noonan and the Governor of the Central Bank, Patrick Honohan, to the IMF, ECB and the European Commission.
The draft letter was not signed by either Mr Noonan or Mr Honohan. It was dated November 2011, with a space left for the exact date.
Ireland is committed to making budgetary adjustments of €3.8bn for next year under its EU/IMF bailout.
Minister Noonan has said he will not reveal the exact measures until he presents the Budget.
However, according to a document presented to the budget committee of the German lower house of parliament yesterday, Ireland will raise the top rate of VAT to 23%, generating an additional €670m.
"After successive Budgets in which income tax burdens were raised significantly, we have decided to focus on indirect tax increases to deliver the bulk of the €1bn additional tax effort required in 2012," the document said.
"To this end, the VAT rate is being raised by 2 percentage points to 23%, which will generate €0.67bn."
In a separate document, the EU-IMF-ECB troika of lenders said that while Ireland continues to perform well under its programme, risks remain for market sentiment, economic growth and potential higher-than-anticipated bank losses.
Minister Howlin told RTÉ’s News at One that no decision had been taken in relation to VAT.
Fianna Fáil Finance Spokesperson Michael McGrath said Mr Noonan needed to urgently make a statement on the issue.
''According to the reports, members of the German parliament have been given details of the Irish Budget three weeks before the Irish parliament and the Irish people,'' Mr McGrath said in a statement.
''If this proves to be true, it would be a staggering and unprecedented breach of faith with the Irish parliament and Irish people on Budget plans. It would represent a fundamental breach of established protocols in relation to the disclosure of budgetary measures.
''We need to know whether the Irish Government has revealed the detail of its Budget plans to the German budget committee."
Mr McGrath added: ''In addition to the reported planned VAT increase, what other information has been given the German authorities about the Budget plans?''