Speaking on RTÉ radio’s Morning Ireland, O’Reilly pointed out that tenants of modular homes would be licensees and would not be afforded the same rights and protections as renters are under the Residential Tenancies Act.

Sinn Fein’s Eoin O Broin said if the government gets this issue wrong, it will be difficult to fix.

There are warnings the move towards modular homes could put pressure on water and electricity systems.

Exemptions are being considered which would exempt free-standing modular or cabin-style homes from planning permission.

In an opening statement given to members of the Public Accounts Committee (PAC), on Tuesday, OPW officials argued that the cost was higher than forecast because of the emergency nature of the pilot programme.

The price rose from an originally estimated €200,000 per residential unit