While Cowen has repeatedly stressed that no payments will be made for what is a voluntary move of over 10,000 staff to 50 locations around the country, the claim follows a surprise Labour Court decision during the summer that staff in the Marine Institute should be paid relocation expenses of 3,750 each following their move from Dublin to Galway.

In the Marine Institute case, management objected to the relocation payment, pointing out that, as the move of 45 institute staff to Galway was voluntary, any concession would have serious repercussions for the government's decentralisation plans involving 10,900 public servants.

Management pleaded that the department of finance had "refused all approaches" for relocation expenses for fear of the consequences for its decentralisation plans.

But the court said that, because the institute's move was mooted before the government announced its decentralisation plans in 2003, the staff should receive relocation expenses of 3,750 each.

Impact, the union involved in the Marine Institute claim, had sought 7,500 and an extra 10 days' annual leave for each employee moving to Galway.

Even though the Labour Court distinguished between the Marine Institute's move and the broader decentralisation issue, civil servants have decided to press ahead with their claim. On the basis of 10,900 public servants due to move, the claim could cost Cowen just over 40m.

Meanwhile, Noel Ahern, junior minister with responsibility for the OPW, revealed in the Dail last week that just four government offices in Dublin had become vacant as a result of decentralisation.

These include buildings in Clondalkin and Park West, the Setanta Centre and the Molesworth Building. The rent for these buildings amounts to just over 1.5m a year.

Somewhat bizarrely, Ahern said the empty premises were now being considered for reallocation to meet other requirements. The cost of acquiring new offices outside Dublin to accommodate public servants has been conservatively estimated at 1bn.

However, the government has said this cost should be met by selling or renting Dublin offices vacated by civil servants.