The receiver for the former Irish Glass Bottle site is to negotiate the commercial sale of 550 housing units to Dublin City Council for affordable housing.

Statutory receiver David Carson had appealed a decision by councillors to designate 900 units out of a total development of 3,500 homes as social or affordable.

The legal obligation for developers is 10% under Part V of the Planning and Development Act, which in the case of Poolbeg is 350 units.

Now the city council has agreed to negotiate the purchase of 550 units on top of the 350 required to be provided.

In a letter to councillors, Assistant Chief Executive Richard Shakespeare stated that he was "disappointed" with the position being taken by the receiver, which he understands is based on legal advice.

Mr Shakespeare said that the deal will be independent of the Strategic Development Zone (SDZ) scheme for Poolbeg but will be legally binding on any subsequent purchaser of the site.

Labour Senator Kevin Humphries said he welcomed the news but said given house price increases the delay in negotiating the deal means a huge bill to the taxpayer.

A hearing before An Bord Pleanála is currently under way into the SDZ scheme for Poolbeg to be built on the former Glass Bottle site and a smaller plot known as the Fabriza site, which together comprise 15 hectares.

Dublin City Council owns around one-quarter of the site as the original Becbay consortium involved the former Dublin Docklands Development Authority (DDDA). Other members of the consortium were developer Bernard McNamara and financier Derek Quinlan.

The land was bought for €412m by Becbay in 2006, but valued at around €30m after the property crash.