Minister for the Environment Phil Hogan has announced the establishment of Irish Water - it will be a subsidiary of Bord Gáis.

Mr Hogan told Cabinet that the current system was unsustainable and the new structure would "create jobs, stop leaks and ensure compliance with public health standards."

He said work on installing the meters will begin in October, but said apartment blocks were a problem and would not be metered immediately.

Mr Hogan predicted that by the time billing commenced in 2014, up to 95% of households would be metered with the remainder being assessed for payment.

Households would not be asked to pay for meters with an upfront charge and the programme of metering and charges will only apply to households connected to a public water supply.

Mr Hogan said the programme was being financed by a loan from the National Pension Reserve Fund on commercial terms.

He said the average annual repayment, at around €40 per year, would be levied as a standing charge in the same way as other utilities.

The minister said meters would have to be replaced every seven years or so but the cost of that would be borne by Irish Water.

Mr Hogan told a press briefing that he was bringing clarity to the situation following confusion at the weekend over the scheme, saying he could not be responsible for what appeared in newspapers.

He said the decision to set up Irish Water was one of the biggest taken by any government since the establishment of the ESB.

Gerry Adams hits out at 'confusion'

Sinn Féin President Gerry Adams has described "confusion" on the introduction of water charges as another "debacle" over a "stealth tax".

Speaking outside Leinster House today, the TD for Louth said it appeared one side of Government was dictating how they would be introduced.

He said Sinn Féin was against their introduction, that struggling families could not afford them and that it could be the final "straw" for the public.

Deputy Adams also attacked a decision by the Troika not to meet Opposition parties while in Dublin for their latest review of Ireland's bailout.

He said this was "undemocratic" and a "disrespectful" step.

The Troika are currently in the Department of Finance meeting officials.

Reacting to the establishment of Irish Water, Fianna Fáil's Dara Calleary said how much households will be charged for water still was not known.