The square, which was bought for under 10,000 earlier this year, is the subject of a Compulsory Purchase Order (CPO) by the council. Last week, businessman Noel O'Gara opened the square in Ranelagh as a car park, but had to close it when local residents protested vigorously and the council took out an injunction. A full hearing on the injunction is due in the High Court tomorrow.

In a letter circulated to residents on Wednesday, the minister said: "While I am reluctant to put a commercial price on such a use of the land, it can hardly be less than 100m and could well be multiples of that. I note that Mr O'Gara is claiming a value of 175m(which I think is absurd)."

Locals are understood to be furious with the minister for effectively talking up the value of the two-acre plot of land and playing into O'Gara's hands. During last week's protest at the salubrious address, residents expressed the opinion that O'Gara's attempt to open the car-park was an effort to portray the land as having a commercial value under Z9 public amenity zoning.

O'Gara is appealing the compulsory purchase order to An Bord Pleanala but the chances of an appeal being upheld are extremely slim.

Reacting to the minister's intervention, Green Party TD John Gormley said McDowell was behaving like an estate agent, talking up the value of the land.

"The effect of the minister's intervention means that O'Gara could now demand a higher land value for the square beyond that of a greenspace amenity in any arbitration after a CPO confirmation, or in negotiations with Dublin city council, " Gormley said.

"While the intent of the minister's letter was to criticise Dublin City Council and presumably score brownie points for his own great wisdom, the unintended effect of his intervention has been to assist O'Gara in obtaining a higher value for the purchase of the square."

O'Gara obtained the square even though it was offered to the council by the vendor, Patrick Darley, as far back as 1986. At the time, the council believed there was a problem with the title deeds and didn't proceed with the purchase.

However, legal advice at the time, which has been seen by the Sunday Tribune, stated that there was no problem with the freehold and that Darley was the sole owner. At the time, Darley offered the land for IR£8,000 but the council dragged out the process for over 10 years without completing the sale.

In one letter in 1992, Darley's London solicitors wrote to what was then Dublin Corporation: "He is completely confused as to how such a small transaction could take so long."

By 1997, the London-based Darley was writing in despair to his solicitors. "Are we likely to reach a solution which will give me enough for a good glass of Guinness in Ryan's pub?"

O'Gara says Darley sold him the land because of the intransigence of the council. O'Gara intends to fight the injunction in court tomorrow but has not engaged legal counsel and will represent himself.

"Why should people in the city pay for a private amenity for multi-millionaires when I want to develop a gym and creche for all the people of Dublin?" he says.

Meanwhile, the Westmeathbased O'Gara says he did nothing wrong in auditing the accounts of one of his companies, despite such a move being an offence under the Companies Act. O'Gara Estates Limited, of which he and his wife are directors and he is secretary, was audited by Noel O'Gara FACA at the same Ballinahowen Court address.

Receipts for the company in the 2004 financial year were 144,715, according to documents filed in the Companies Office.

O'Gara says he informed the tax authorities at the time that he was the auditor. "They accepted that it's only a small private company and I couldn't afford to pay an outside auditor, " he said.

Away from the hothouse of Ranelagh, O'Gara is next week hosting a conference on the Yorkshire Ripper in Leeds. He has written a book claiming that the jailed Peter Sutcliffe is not guilty of murdering more than a dozen prostitutes in the 1980s and that the real culprit is a Co Offaly native with whom he worked in the 1970s.