A Fianna Fáil TD has called for law changes to allow officials and agencies to be "prosecuted" for serious health service controversies, after it emerged no one will face criminal charges over the 'Grace' foster abuse case.

Fianna Fáil TD for Carlow-Kilkenny John McGuinness, who was central to uncovering the case, said the changes are needed after gardaí confirmed the Director of Public Prosecutions has decided not to pursue charges.

In a letter sent on 12 January and confirmed by gardai today, the DPP said after examining garda recommendations regarding a complaint last year against officials and agencies involved in the 'Grace' case, it has decided to take no further action.

"An Garda Síochána completed an investigation and submitted a file to the Director of Public Prosecutions. The director of Public Prosecutions has directed no criminal charges in this investigation," a garda statement said.

"An Garda Síochána does not comment on or confirm speculation on the contents of correspondence with the Office of the DPP.

A similar decision was made in 2015 in relation to the foster family at the centre of the Grace case, which involves allegations of significant abuse between the early 1990s and 2009, involving a woman with severe intellectual and physical disabilities.

A State commission of investigation led by senior counsel Marjorie Farrelly was set up in 2016 to examine questions over why Grace was not moved from the home when authorities first learned of the abuse allegations, and is due to complete its work in May.

Read more: Grace case is 'greatest scandal of our time', Dáil told

But, speaking to RTÉ's News At One programme, Mr McGuinness said he believes the law must now be changed to allow officials and agencies to be "prosecuted" for issues which occur under their care.

"For a long time now I've been highlighting the issue of the Ministers and Secretaries Act 1924, where the responsibility for everything falls to the minister," Mr McGuinness said.

"We need to change those structures, we need to reform the law, we need to have individuals and agencies, Government departments and others held responsible for failures and inefficiencies.

"If we don't modernise the law then we will fail the country over and over again. And, in this case, and in many of the other cases within the HSE, individuals and families have been failed in a dramatic and negative fashion, and that can't be allowed to continue.

"The Oireachtas finance, public expenditure and reform committee that I chair has a responsibility in this area, and we'll be reviewing this so that agencies and individuals can be prosecuted and can be named," Mr McGuinness said.

Asked about the decision by the DPP, he added: "I'm deeply disappointed. I believe the DPP should come forward now with an explanation as to why prosecutions or sanctions are not to happen.

"We at least deserve that from the DPP in these unusual circumstances."