The Tánaiste has said he did not add the Vatican to the list of embassies identified for possible closure in a review carried out by the Department of Foreign Affairs.
Eamon Gilmore said closure of embassies was under consideration for some time and a number were examined at various times and the Vatican was on that list from an early stage.
He said it was a Government decision based on a recommendation from him and when financial circumstances improve it will look at embassies again.
Mr Gilmore added that if the requirement that the Vatican embassy be housed in a separate building was relaxed, the decision on its closure could be reviewed.
A Department of Foreign Affairs spokesperson said the Vatican was on the original list of embassies identifed for closure following a spending reveiw within the department.
He said a third embassy to another country was subsequently added to the list and newspaper reports that the Vatican was added were not correct.
The Tánaiste announced last November that Ireland's embassies to the Vatican and Iran, as well as its representative office in Timor Leste, would close saving the Government around €1.25m a year.
He said the embassy to the Holy See yielded no economic return and Ireland's interests could be represented by a non-resident ambassador.