Update 11am: Katherine Zappone says reports of a rift at Cabinet do not reflect what is really going on.
Reports say Fine Gael TDs are concerned that her plans for childcare will only benefit low income families and not middle earners.
Katherine Zappone said they are still negotiating, saying: "The story doesn't reflect the reailty of what is going on in terms of Budget negotiations. I am in very intense and serious negotiations with Mr Donohoe, I don't know where these phantom sources are coming from.
"It doesn't reflect at all what is going on, the negotiations have been amicable, firm.
"I think with both of us sharing our own commitment to do something significant."
Earlier: There is a reported Cabinet rift over childcare costs.
The Irish Times says Children's Minister Katherine Zappone was left out of Budget discussions after she unveiled a plan to subsidise care for low-income families.
However, the plan was criticised for neglecting the so-called "squeezed middle" and Minister Zappone was not consulted about alternatives.
Noirin Hayes, a visiting Professor in the School of Education at Trinity College Dublin, said: "I think part of the problem is the effort to polarise the parents and the services in this way.
"I don’t think it's forcing parents to do anything, but what I think it is reflecting is the ad hoc nature of the development of the supports that we have for families with children."