The whole Irish Water saga took another turn for the worse this week with confirmation from Eurostat that it would not be possible to place the activities of the utility off the State’s balance sheet.

Jennifer Banim, assistant director general with responsibility for economic statistics at the CSO, said the agency would seek to understand and review the decision to keep Irish Water on the Government’s balance sheet.

Accusations by ministers that the EU’s statistics body was wrong in its assessment that Irish Water was not sufficiently independent of the Government will be answered by Eurostat today.

Irish Water will need to be completely overhauled, becoming much more of a commercial entity and charging more economic prices for water if the Government wants its debts off the national books, according to Eurostat.

Taoiseach Enda Kenny has been called on to urgently outline what the Coalition plans to do after Irish Water failed a crucial European test to keep the utility’s debt away from public-spending calculations.

Eurostat has released its reasons for deciding that Irish Water should be considered as part of the government's accounts.

The Minister for Finance has admitted a ruling by Eurostat, that the cost of Irish Water must remain on the Government's balance sheet, is "embarrassing" and "controversial" for the government.

Eurostat is expected to rule later today on whether the funds spent on Irish Water so far will have to stay on the Exchequer balance sheet

Alcohol and tobacco prices are higher here than anywhere else in the EU, official Eurostat figures have revealed.

The eurozone returned to inflation in May with a higher- than-expected increase in consumer prices after five months of falls and stagnation, due to rising food costs and the waning impact of cheap energy.

More than €1.3bn will be added to the government deficit over a three-year period if a key Eurostat decision on Irish Water goes against the government.

Irish Water has been provisionally placed on the Government's balance sheet as one of the bodies included in the Central Government Sector.