Pyrite, a substance found in infill material that can cause walls to crack, has been found in a planned €16.6m housing development in Ballymun in north Dublin.

A spokeswoman for Ballymun Regeneration Limited (BRL) said that the pyrite was discovered early in the construction process, which started in June 2005.

The agency is in ongoing discussions with the contractor about the scheme, according to documentation circulated by Dublin City Council. A spokesman for the contractor was unavailable for comment.

Pyrite has affected hundreds of homes in north Dublin, with some houses set to be demolished because of the cracks it causes. Irish Asphalt and the Lagan Group have been involved in a long-running legal dispute with Seamus Ross's Menolly Group in relation to damage to housing allegedly caused by the substance.

Meanwhile, BRL has earmarked a 60-acre site near Ikea and the M50 for science research and development projects.

It has made a joint submission with Dublin City University to Enterprise Ireland about developing wet labs – laboratories where chemicals, drugs and other matter are tested and analysed – on the site.

"If approved this year, they could be under construction next year and they would provide a range of jobs for technicians and post graduates," a spokeswoman for BRL

The spokeswoman said the joint proposal with DCU was made in response to Enterprise Ireland's call for proposals from local authorities in relation to suitable sites for wet labs and for the development of life sciences generally.

"Ballymun has a site eminently suitable for a cluster of wet labs on the M50 lands. Ballymun Regeneration has a planning framework approved by Fingal County Council for research and development clusters to be built on these lands and the wet labs would be the start," a spokeswoman for BRL said.