Cost overruns in projects such as the National Children’s Hospital and the National Broadband Plan "squeeze the budget for other investments set out in the National Development Plan," the State’s independent finance watchdog has warned.

A draft report of the Irish Fiscal Advisory Council’s latest assessment, seen by RTÉ News, says that if other large projects followed this trend of cost overruns, the investment available for flood defences, primary care centres and schools, would reduce in scope by possibly €2 billion.

The council is also sounding a note of caution around health spending and advises that overruns there could be repeated.

These have averaged at around €0.5 billion in recent years.

This assessment found that Government spending breached the Expenditure Benchmark limit last year and the IFAC also believes that some of the Governmen's medium term plans are not realistic.

Sinn Féin’s deputy spokesperson on Public Expenditure Jonathan O'Brien described the report as evidence that Government's projections lack credibility.

He accused the Government of failing translate a fast-growing economy into better public services, housing and quality of living.

A spokesperson for the Minister for Finance said Paschal Donohoe will respond to the report’s findings after it is published tomorrow.

The department said that the European Commission, who is the gatekeeper for the fiscal rules, has assessed the Government Budgets to be compliant with the fiscal rules.

The Department of Finance also pointed out that the IFAC has endorsed its forecasts.

But the spokesperson said it is clear that there have been with-in year increases in spending, beyond that set out in the Budget, this has largely been due to increases in health expenditure.

Mr Donohoe will publish a report shortly outlining how our reliance on this corporation tax can be reduced.

The Government is also establishing a Rainy Day Fund and has committed to using windfall gains, including from the financial sector, for debt reduction, the spokesperson said.