Taoiseach Leo Varadkar has said Sinn Féin are "a Eurosceptic, high tax and sectarian party" and they are incompatible coalition partners for Fine Gael.

Speaking at NUI Galway, the Taoiseach said that he has not "slapped down" Minister of State Jim Daly over his talk of a Fine Gael-Sinn Féin government.

On the possibility of coalition with Sinn Féin, Mr Varadkar said: "My view is that my party, Fine Gael and Sinn Féin are incompatible. They are a Eurosceptic, high-tax, sectarian party and we are not.

"For example, they want to increase VAT which would increase the cost of living for everyone. They don't want to give any tax breaks to middle-income people, " he said.

"They are euro-critical at a time that we need allies around Europe and also, they are very nationalistic at a time when I think we should be internationalist."

He added, "I am puzzled as to why everyone is so obsessed about future coalitions and elections. There is no election planned for this year and I am leading a Government that is working." 

Addressing the furore over comments made by Mr Daly to Hot Press magazine, the Taoiseach said: "I think Jim is doing a fabulous job. He is somebody who is outspoken and speaks his mind in a way that perhaps I did a lot in the past as well. I am certainly not slapping anyone down."

In an interview with the magazine Mr Daly said he had no objections on principle to Sinn Féin entering government.

A spokesperson for Mr Varadkar last night described the comments as "not appropriate."

Responding to Mr Varadkar's comments Sinn Féin Chief Whip Aengus O'Snodaigh denied that the party is sectarian.

He said that while other party leaders have promised in the past not to enter coalition with rival parties, after the elections those promises were forgotten about.

He said that Sinn Féin is focused on getting its policies implemented and that this will be their priority.

Earlier the Sinn Féin spokesperson on foreign affairs and trade David Cullinane said that Sinn Féin is the only party that is being honest about their position after the next election.

He said that it will talk to the other parties but will only enter government, if it means it will get its policies implemented.