The Tanaiste says she can't say for certain whether the government will be allowed to keep Irish Water's spending off its books.
Joan Burton says the EU won't issue an official ruling until well into the New Year.
If the EU rules against Ireland, the government could face a mini-budget - and the potential return of austerity.
The EU needs to be satisfied that more than half of Irish Water's overall income is coming from its "sales" - i.e. the value of the water charges paid by homes and businesses.
While the state is now only directly funding 44 per cent of Irish Water's costs, the EU's statistics agency Eurostat could perceive the water conservation grant, and other indirect funding, as part of Irish Water's income.
This would push the state's contribution above the crucial 50 per cent market - and bring all of Irish Water's spending back onto the books as "government spending".
This would make it harder for Ireland to meet the Budget targets it agreed with the EU back in 2010 - and potentially open the door for a mini-budget with austerity measures of over half a billion euro.
Our political correspondent Gavan Reilly filed this report for the National Lunchtime News:
