Religious congregations would not have participated in the compensation scheme for abuse victims without an indemnity clause and a cap on their contribution, the Minister for Finance told the Dáil.
Mr McCreevy also said that an assessment of the financial assets of the religious congregations was deemed "not relevant" because their contribution to the Residential Institutions Redress Scheme was to be voluntary.
He believed there was evidence in the Department of Education files that the residential institutions were not policed in a proper manner.
"The State has a very serious responsibility in this regard," he said.
During Finance questions, the Minister told Labour's spokeswoman, Ms Joan Burton, the Government had already decided to proceed with the redress scheme with or without the religious orders, to "bring some healing and closure to the victims of child abuse, recognising its own responsibilities to those victims".
As Minister for Finance he would seek the maximum contribution from everyone except the taxpayer or Exchequer, but it was "clear from the early stages of the negotiations with the congregations that they would not participate and contribute to the scheme without a cap and an indemnity," Mr McCreevy stressed.
Negotiators proposed an approach based on a 50:50 contribution with a cap of €127 million and an agreement in principle to an indemnity to be drafted later between the two sides.
This was put to the congregations at a meeting in October 2001 but was not accepted by them at that point.
The Minister for Education announced in January 2002 the Government had agreed this in principle, after further discussions between him and the congregations.
The Department of Finance was not involved in meetings about the detailed provisions of the indemnity scheme but was kept informed of "developments generally".
The best guess of the Department of Education in June 2002 about the estimated cost of the scheme was between €250 and €500 million.
The negotiations were conducted on the basis that the religious congregations had to decide whether to make a contribution or to fight each case individually.
