THE government has volunteered to put €20m into a fund to bring 12 US students to Ireland on scholarship each year.

The investment will be placed in an endowment fund to support the George Mitchell Scholarship Fund, which was established in 1999.

The €20m figure was agreed in 2007 when the country's finances were in far better health but the Department of Education has said the commitment will go ahead regardless, despite massive cutbacks to school and teaching budgets. The department confirmed that in the past 10 years of the Scholarship Fund, only 105 students had come to Ireland as part of the programme.

The new €20m investment will support the annual attendance of 12 students, by offering them a living allowance, airline tickets, tuition and accommodation.

The cost per student each year is estimated at a maximum of €27,000, meaning the actual cost of the scholarships each year should be no more than €324,000.

Instead, the government has committed €20m of taxpayers' money – with a maximum of €4m per year – to an endowment fund, which will then be invested. Based on a maximum investment, the cost over the course of five years will have worked out at the equivalent of €330,000 per student.

A statement from the Department of Education said an original investment of around €2.5m when the programme was instituted was now proving insufficient to support the programme.

A spokesman said: "Mitchell scholars are likely to occupy positions of influence in the US in the future. We expect that their period of study here will create an enduring legacy of goodwill towards Ireland."

Critics of the scheme said dozens of American students were already coming to Ireland with other US universities without a massive charge to the exchequer.

One source said: "A hundred students from Notre Dame go to Ireland every year, similar numbers from Boston College – the Irish taxpayer does not pay a penny."