Strong action needs to be taken to stop the "hollowing out" and decimation of historic and vibrant towns across Ireland, the Dáil has been told.

Fianna Fáil local government spokesman Barry Cowen said unsustainably high commercial rates, expensive car parking charges, the closure of Garda stations, the threat faced by An Post to its future viability and the decision of State-supported banks to close branches, "have left numerous towns reeling from the loss of critical local services".

He added that the Government was “taking the axe” to town councils, which had given communities a focal point to “fight their corner”

Mr Cowen was introducing his Local Government (Town Centres) Bill, which establishes local “teams” with the powers to develop and implement a strategy to revitalise town centres. The Laois-Offaly TD said each town would have a team drawn from business, the Civil Service, politics, An Garda and civic groups to evaluate the issues facing it.

He said a localised team for each town would allow them to identify their own needs as opposed to an “unwieldy top-down approach”.

Mr Cowen said that in his constituency “Banagher, Clara, Birr, Tullamore, Daingean, Kilcormac and so on have traditionally been centres of their hinterlands but they are under immense pressure to retain that status”.

Minister of State Jan O’Sullivan acknowledged that proposals in the legislation had merit but they did not require the creation of new structures and she was satisfied “there is no need for another layer of responsibility”.

She also said the Bill could have significant expense implications for the taxpayer, depending on the level of activity of the proposed teams.

Ms O’Sullivan said the Government recognised the importance of local economic development and town governance in its 2012 action programme for effective local government.

“We have all seen the effects of urban sprawl and poorly planned out-of-town retail development and families all over Ireland are paying for those mistakes, through more expensive infrastructure, longer journeys and congestion.”

The Minister said many of Mr Cowen’s proposals had already been done by Government, “including new development guidelines introduced this year requiring planning authorities to put in place reduced development contributions or waivers to support town centre development”.

And the 2012 retail development guidelines “are aimed at promoting and supporting the vitality and viability of town and city centres through the planning system”.

Labour TD Kevin Humphreys welcomed the idea of town teams as "excellent". He said Ranelagh in his Dublin South-East constituency was reinventing itself and the increased footfall was manifest in local shops and restaurants.

Sinn Féin local government spokesman Brian Stanley said his concern about the legislation was that in creating a new structure it will become part of the problem as "just another talking shop".

Independent TD Mick Wallace highlighted the commercial rates problem in Dublin. “I have five wine bars and a coffee shop” and they were looking at a rates increase of 45 per cent. He said it made no sense. “We are in a position where rates are 25 per cent of our rent, which is not sustainable.”

Fine Gael TD Frankie Feighan said that many of the main streets of Irish towns were becoming like high streets in the UK. He said it was ridiculous that in towns in Roscommon for example, people would "rent out a property almost for nothing to get somebody into it, but half of the year's rental goes toward rates".

Independent TD Finian McGrath expressed concern that the Government did not really “get” the issue in relation to commercial rates.

He highlighted the case of a Co Clare businessman with a restaurant-pub, employing 20 people and paying €37,000 in commercial rates.

Mr McGrath said that before the man “gets out of bed he has to pay €37,000 before he starts to pay his staff”.

He acknowledged the Minister’s comments that 87 of 88 rating authorities maintained the same rates this year as last.

But “that is an issue we need to hammer home”. He said the authorities keeping the rates the same as last year, “are still charging small businesses, which are trying to pay ten, 15 or 20 people, €37,000 per year”.