The taxpayer has been left with a legal bill for €32m after delays in moving a Garda station in central Dublin.
The Public Accounts Committee has heard how a developer took legal action against the State after it failed to hand over its control of land at Harcourt Terrace in Dublin.
The developer Durkan Homes built 215 affordable homes under a 'land swap' deal with the Government, but because of delays in moving the Garda station, the State could not fulfil its side of the agreement.
Geraldine Tallon from the Department of the Environment said that the ruling was entirely the Government's fault.
"Hindsight is 20/20 vision, but I do very deeply regret the way this turned out," she said.
"I would dearly have liked this to work in the way that it should have worked, and that it was intended to work".
"I have to acknowledge that the developer fulfilled all his conditions," she added.