The council has confirmed that it has already refused a number of developments in the Athboy area in the west of the county due to lack of sewage capacity.

It also admitted that it now only has capacity for 3,000 more homes in the east Meath region, which is likely to threaten developer Bill Doyle's ambitious plans to build 5,000 homes in Byranstown on the outskirts of Drogheda.

The council's admission comes months after Kildare county council admitted that it had insufficient sewage capacity to serve three of that county's main towns, Newbridge, Naas and Clane.

According to the Construction Industry Federation (CIF), the lack of sewage capacity in the greater Dublin area is one of the main factors behind the fall in the number of housing completions this year.

The federation's eastern region executive Kevin Flavin said that sewage problems had led to a 27% decrease in housing completions in Meath so far this year. He also said that CIF had calculated that just 16% of the land zoned residential by the council there was properly serviced for sewage.

"It is a serious concern for developers and it should be a serious concern for the public at large. If house completions continue to fall because of this, house price inflation will go up, " he said.

Flavin said that although some developers had been building temporary treatment facilities so their developments could go ahead, it was unclear whether this could continue due to the new European Water Framework Directive, which is due to come into force next year.

A spokesman for Meath county council, Bill Sweeney, said that the council had spent over 150m on improving the county's sewage infrastructure over the past five years.

He said that the council was planning to build a new sewage facility for the Athboy area, which will service eight towns and villages. "The council is currently in the process of awarding contracts for the scheme which will be completed in 2009, " said Sweeney.

He said that the council had submitted a 300m improvement plan to the Department of the Environment and was awaiting a funding announcement on the plan.

Meanwhile, a spokesman for the department of the environment when asked about the lack of sewage provision in the Greater Dublin Area said that "for a large part, the issues raised by your paper are more appropriate to be dealt with by Meath county council, since the council is responsible for advancing its water services programme and the issue or refusal of planning permissions".

"The responsibility for any deficit in water services infrastructure to meet the developmental needs of an area lies with the relevant local authority."