All funding to Scouting Ireland will be suspended for as long as the current board remains in place, Minister for Children and Youth Affairs Katherine Zappone has said.
In April, Minister Zappone suspended State funding to the organisation over grave concerns about its governance.
It followed an allegation by a female scout leader in 2016 that she had been raped seven years earlier while on a scouting trip when she was 18.
The man whom the allegation was made against was suspended from the Scouts pending an investigation.
The Director of Public Prosecutions decided not to prosecute. However, he was not garda vetted before returning to the Scouts, despite a recommendation by gardaí.
Minister Zappone restored funding to Scouting Ireland for three months in June after receiving commitments that recommendations of an independent review will be implemented.
The situation was to be reassessed this month.
In a statement, Ms Zappone said she was "very concerned" by recent events, particularly a vote taken by the board of Scouting Ireland to reinstate Chief Scout Christy McCann as Chair of the organisation's EGM on 6 October.
Mr McCann stepped aside earlier this year to allow an independent investigation into the organisation's handling of the allegation.
Ms Zappone also said the interim chair of the Scouting Ireland board, Annette Byrne, has indicated she can no longer stand behind assurances given to the minister "with regard to the delivery of future change essential to ensure the robust governance of the organisation."
She said this is a crucial moment for scouting and urged the directors to do the right thing in the best interests of scouting and of young people.
She said she wanted to reassure parents her actions stem from bad governance and have nothing to do with the commitment of its volunteers.