The Housing Minister says no funding has been requested or approved for affordable rentals at O'Devaney Gardens in Dublin.
He made the claim in a letter to the Lord Mayor Paul McAuliffe, after the deal for hundreds of homes was approved by Dublin City Council earlier this month.
The approval came after a cross-party group of councillors - from Fianna Fáil, the Social Democrats, the Green Party and Labour - announced they'd reached a deal with the developer.
Councillors said the arrangement would see 50% social and affordable units - as previously agreed - but another 30% would also be sold to an approved housing body and offered as affordable rental.
However, Sinn Féin's Eoin Ó Broin, using Freedom of Information laws, obtained a copy of the Housing Minister's letter to the Lord Mayor.
Minister Murphy said he was concerned by the "confusion that may have resulted from the pre-vote statement" by the group of councillors - which he claims was made without any prior engagement with his department.
He suggested that the proposed purchase of 30% of the units for affordable rental would "contravene the tenure mix" agreed by the council and supported by his own department.
He wrote: "Without a clear and sustainable position on the legal basis, funding, and operation of the suggested plan, it seems highly unlikely that the purchase of private units from the developer as outlined by the Dublin Agreement Group can deliver its intended goal of affordable rental.
"I would also note that I have discussed the proposal with some elected members of the council who were under the impression that a new deal or agreement had been reached, was legally binding, and that cost rental or affordable rental would now be delivered.
"This is not the case - there has been no new agreement between Dublin City Council and [developers] Barta ."
Reacting to the letter, Eoin Ó Broin argued: "Essentially what he's saying is that some councillors have voted for this thing because they believe there is a legally binding agreement for 30% affordable rental, and that is not the case.
"What it means is that the decision of Dublin City Council was taken on the basis of a falsehood... that matter now needs to be revisited."
