Taoiseach Enda Kenny warned today that the Government was not in a position to “write large cheques” while conceding tax figures published this afternoon were “quite strong”.

Speaking at the opening of a new €17 million science building at IT Sligo, in advance of the publication of the exchequer returns, Mr Kenny warned that "our situation continues to be fragile".

Asked whether the new figures, which showed the tax take was €1 billion ahead of target, would mean tax breaks in the Budget, he said the State still had an enormous debt.

"We are not in a position to write large cheques. What we are in a position to do is to continue to manage the economy in a way that continues to make Ireland really competitive, that makes it attractive for continued investment and for the creation of jobs".

Tánaiste Joan Burton said the exchequer returns were positive, adding that it was critical that forward economic momentum be maintained.

However, she warned against unrealistically raising people’s expectations ahead of next month’s Budget.

Ms Burton said any leeway will be targeted towards low and middle income earners and families but said no detailed discussions have taken place yet about how to do so.

She said the economic recovery is “certainly emphasised” by the figures.

“The landscape of this Budget is certainly easier than the three previous budgets that this Government has had to address,” Ms Burton said.

“The Irish economy is in a recovery and that recovery, though, still has to be felt by people right throughout the country.

“It is a much more positive place to be in in terms of this Budget but we have to be careful in approaching this Budget. I think we have to be very careful not to raise expectations unrealistically.”

A Government spokesman said the “figures are positive and are clear evidence that the plan is working”.

“But nothing will be done to jeopardise the recovery. Regarding tax any measure introduced will be designed to enhance growth, advance the recovery and promote job creation.”