Minister for Transport, Tourism and Sport Shane Ross says the government will not "trust" the Football Association of Ireland with funding at present.
The Government are withholding €2.9 million in annual funds to the Association following the corporate governance issues which have dogged the FAI.
The state is currently funding the women's national team without the FAI being used as a conduit for the money. This is being done via consultants BDO to the tune of €195,000.
The Government is to also safeguard 60 community based development officers and their programmes with a €2 million fund, which is to be appropriated next year.
In comments to Virgin Media News' Richard Chambers, Minister Ross outlined the strategy in regards to funding an organisation he termed as a "financial basket case" in the wake of the debt figure revealed last Friday.
"The principles are quite clear. We don't trust the FAI - we don't trust them with the money," he said.
"We've withdrawn funding from them and we're not going to give them any government money or tax-payers money.
"But what we are going to ensure though is that we set up a channel. And we did that with the women's international group as well.
"And that was done with BDO. We're going to pay money to an intermediary who are then going to pay it out. And that's the model that's going to work and who are then going to pay it out to the sports programmes and to the people involved.
"Because we're determined that the riches that have been reaped by people at the top and the contrast between that and the poverty of the people and the volunteers and small sports clubs at the bottom, they should not suffer. These people should not suffer."
On potential issues with UEFA, he also commented that, "UEFA would recognise that we are worried about government funding" and that the government will not "interfere with [the FAI's] internal affairs or operations".
Minister Ross also added that the aforementioned contrast "disgusted" him.
"It is just so bad, it is just so disgusting," he said.
FAI representatives are due to go before the Oireachtas on Wednesday. Minister Ross urged them to "apologise". He also confirmed that he won't be attending Wednesday's meeting but rather next week.
"We want to go to a meeting where we can say to the Joint Oireachtas Committee, 'This is our plan for the money and it's going to work in this very, very detailed way'. At the moment, we've worked it out with BDO about how we're going to do it with the women's football which is great that we have been able to do that. That's €195,000. We've now got to work out the detail of how we actually get the money to the sports clubs and the sports development officers."
He also added that he "doesn't want a confrontation with the FAI board". But he also commented that "they don't like me at all and they've got justification. But I don't like them very much quite honestly. I certainly don't like the old board".
But on the question of past support to the FAI and board, Minister Ross had this to say: "Nobody knew what was going on and we were all rejoicing in the success of the Irish team and the success of Irish football. A lot of us didn't know what was going on behind the scenes and of course that's unacceptable."
Joe Molloy, Richie McCormack and the Irish Daily Star's Kieran Cunningham discussed FAI developments on the Newsround: