The Government is considering whether a new insurance levy should be introduced to fund flood cover for homeowners who cannot buy policies.

Insurance companies do not offer cover to homes and businesses in areas at risk of flooding.

The Department of Environment, the Department of Finance and the Office of Public works are working on possible solutions.

Senior officials are expected to give Ministers an interim report on the matter in the third week of January.

It is understood a decision is most likely to be made by the next Government.

In the UK people in areas prone to flooding can buy insurance following the introduction of a new scheme which applies a levy of €15 on all home insurance policies.

The money goes to a fund which is used to compensate owners of flooded homes who are not normally offered cover. 

However, policy holders in Ireland are already paying two levies on insurance.

There is a 2% charge to pay for the collapse of Quinn Insurance and a 3% tax on policies.

So another levy would increase prices for all homeowners.

Conor Faughnan of AA Ireland, which offers cover to 70,000 homes, says that any new charge should not be paid for by policy holders but should come from central Government funds.

He told RTÉ News that part of the flooding problem was caused by poor planning decisions in the past.