EDUCATION Minister Ruairi Quinn admitted publicly for the first time on Good Friday that religious orders don't have the cash or assets to pay their share of the compensation bill for abuse.
And he said he had no intention of bankrupting the orders - which leaves him facing a massive battle to recover their half of a €1.5bn bill.
The taxpayer is already picking up €750m of the expected final cost but now faces having to pay far more.
In the place of previous offers, Mr Quinn now wants the orders to hand over the deeds of schools and medical facilities to finally settle the deal on compensating victims of abuse in residential institutions.
However, it may prove difficult to implement the handover of deeds as many schools controlled by the orders have been placed in trust and are no longer in the ownership of the orders.
Trusts are complex legal entities, and NUI Maynooth law lecturer Neil Maddox said that the Government was facing a "legal headache" on this front.
So far, the orders have paid, or are in a position to pay, about €200m -- although in some cases, over a longer timescale than originally planned.
Mr Quinn told the Irish Independent: "The property market has collapsed; the market value of capital assets has plummeted. Nobody wants to bankrupt the orders, who have made a positive contribution for generations to this country, for which this country is grateful, myself included."
But the Government is not backing down on its demand that 18 congregations covered by the Residential Institutions Redress Scheme split the cost 50:50 with the taxpayer.
The religious orders never accepted the principle of 50:50, and when they topped up their contribution offer in 2009, they did so on a "voluntary" basis.
As the Redress Board, which has made 14,000 awards to date, nears the end of its work, the figure being put on the final cost of the scheme and associated matters is €1.5bn.
The minister accepts the orders are not in a position to come "remotely close" to paying 50pc of the bill but, he said, "they can do something else".
He asked them: "Please give us the title deeds of your educational infrastructure."
The Government is also interested in medical facilities.
Mr Quinn said there was no question of requiring them to vacate properties, or hand over patronage of schools -- rather to make the Government, and ultimately the taxpayer, the "landlord" of the property.
Mr Quinn has met the orders in recent months and is in the process of sending letters to the 18 congregations setting out his position, in a bid to bring finality to the long-running saga.
Shortfall
He said he wanted a written response from them so that he could report progress to the Government.
The letter states: "As there is a considerable shortfall to be overcome to realise the 50pc contribution towards the ultimate cost of the response to residential institution child abuse, I would request your congregation's views on how a sharing of the costs on a 50:50 basis will be realised."
The move comes as the Redress Board, which was set up in 2002, finalises its work.
In another significant development, the Cabinet last Tuesday approved the shape of legislation to set up a trust, backed by a €110m statutory fund, to provide ongoing support for victims.
It has been generally welcomed, but religious orders and others are concerned that the proposed fund is restricted to those who have already been through the redress system.
The Oblates, one of the 18 congregations, welcomed the decision to establish a trust for former residents but said access to the trust should not be confined only to those who have received payments under the redress scheme.
"We have already emphasised to the Department of Education that access to the trust should be open to all former residents of these institutions, based on need and the fact that many are now elderly and in need of advice, counselling and other supports."
London-based emigrants' rights activist, Sally Mulready, recently appointed a member of the Council of State by President Michael D Higgins, said a small number of people who were among the most vulnerable of the survivors' population should not be excluded from the trust.
"Their failure to apply in time to the Redress Board is part of that vulnerability," she said.