The government is to give Bord Gáis Éireann the responsibility for setting up Irish Water, the body that will oversee the roll out of metering.

The Minister for the Environment, Phil Hogan said there would be no bills until 2014 and the cost of installation would be paid by householders through an annual standing charge.

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

He said it would operate on a temporary basis pending legislation, and the process of installing meters would begin this October.

The company, he said, would be set up as a subsidiary of Bord Gáis Éireann and would remain in public ownership come what may.

Mr Hogan said no bills would be issued until 2014 by which time 95% of households would have had a meter installed, without an upfront payment for installation.

The programme was being financed by a loan from the National Pension Reserve Fund on commercial terms, and the average annual repayment approximated to around forty euro per household per annum. This sum would be levied as a standing charge in the same way as other utilities. Where it was not possible to install a meter the household would be subject to an assessed bill.

In a statement this evening Bord Gáis said that it believed it had a track record in establishing a new state company; building out a nationwide network infrastructure and providing full-scale utility services to customers. This experience, the company said, placed it in a position where it could make a positive contribution to the effort to reform water services in Ireland.

In addition, Bord Gáis said that it believes that Irish Water represents an opportunity to establish a commercially successful infrastructure company that will deliver quality services to the population, at reasonable prices, while also creating a valuable asset for the state.

Bord Gáis will now, it says, engage fully with the Department of Environment, Community and Local Government, NewERA and other bodies, including the Local Authorities, to further explore key proposals and issues concerning the implementation of Irish Water.