Education Minister Ruairi Quinn, whose department oversees the redress board, said he would not reverse a decision by the previous Government not to include the mother and child Bethany institution.
A survivors’ group, headed by Derek Leinster, accused the minister of ignoring the specifics of the home run by Protestant evangelicals and regurgitating tired excuses.
“Ruairi Quinn has refused to address the then state’s decision to regulate the sectarianism of the welfare system, but not the actual welfare of neglected and abandoned children,” he said.
“Ruairi Quinn is condoning official sectarianism today in this Republic, as a result.
“Ruairi Quinn has rejected not just Bethany survivors, but his own party colleagues Joe Costello and Kathleen Lynch who have been campaigning for years on this issue.”
The Bethany Survivors’ Group represents people who had been infants in Rathgar home run between 1922 to 1972.
Mr Quinn said the home was not included in the Residential Institutions Redress Scheme by the Fianna Fáil/Green coalition as it operated as a mother and baby home.
He also insisted religious ethos was not one of the criteria used for inclusion in the scheme.
In a statement the Department of Education said: “Having taken all the circumstances into account, Minister Quinn has found no basis to revisit this decision.
“The minister has noted the media reports of the Bethany Survivors Group’s intention to initiate legal proceedings in this matter.”
Mr Leinster, who was in the home from 1941-45, was further angered after securing support for their case from Labour TD and now junior minister Kathleen Lynch who was thrown out of the Dáil last October while raising the issue. Labour TD Joe Costello also backed the case.
The Bethany group claims to have documents proving state officials ignored evidence of neglect and record numbers of deaths in the home in the late 1930s.
They also claim the state ordered the home not to take in Catholic children.
Last year, the group, with the help of Griffith College Dublin lecturer Niall Meehan, discovered 219 unmarked graves in Mount Jerome cemetery, Harold’s Cross, of children from the home.
Records show more than one third died in the five years from 1935-39.