Some of the largest business and IT consultants operating in the State – including IBM, Accenture, Ernst and Young, and Oracle – are among the companies paid €50 million in consultancy fees by Irish Water during its first year in operation.

The company yesterday defended the expenditure, which comprised half of its overall spend, in the face of widespread criticism it was outrageous and “a scandal waiting to evolve”.

Chief executive John Tierney justified it on the basis that setting up such a large national utility within a year would otherwise not have been possible. He said it had been set up from a "greenfield site" and was now up and running. And he said the consultancy fees went to large firms in the State on "fixed price contracts".

However, the disclosure prompted sharp criticism from Opposition parties who described the spend as "scandalous" and excessive. Tánaiste Eamon Gilmore conceded it seemed very high.

Fianna Fáil leader Micheál Martin said the costs were a "scandal waiting to evolve". "We have repeatedly been asking for the costs of consultancies and to publish all costs and they have refused to do so . . . People will be very angry if their water charges bills go to pay such extravagant amount of consultancies."

Later yesterday, Irish Water disclosed some detail on how the money was spent. It included expert advice on setting up information technology, including billing and customer service systems, financial management and asset management systems.

Mr Tierney gave a reassurance that such a level of consultant costs would not occur in 2014.