Ireland will maintain diplomatic relations with the Vatican through an ambassador based in Dublin, it has been confirmed.

Tanaiste and Foreign Affairs Minister Eamon Gilmore said a senior diplomat would be appointed to service the Holy See directly from Ireland.

Of the other two resident embassies being shut down, Mr Gilmore said an ambassador from a neighbouring country would take responsibility for Iran while the ambassador to Singapore would maintain relations with Timor Leste.

Fianna Fail deputy leader Eamon O Cuiv told Mr Gilmore he did not believe the mission to the Vatican was being shut down for financial reasons.

The Galway West TD said savings could easily have been made elsewhere and argued Ireland's international reputation would be damaged by the move at a time when countries such as Britain, Australia and Russia have all upgraded missions to the Holy See.

"When has Ireland decided that issues such as human rights, third world aid, freedom of religion, the environment, disarmament or democracy are not important any more, and that everything is just a matter of economic gain?" he said in the Dail.

Mr O Cuiv said the Vatican is a major player in global diplomacy, with one of the largest diplomatic corps in the world.

But Mr Gilmore said the resident embassy closure would save the taxpayer 1.2 million euro a year while diplomatic relations would continue.

"I would hope that in the course of time, as the country recovers, that we will be able to return to the question of whether or not we should have resident embassies in those locations," he said.

"But right now it's not the Government's intention to reverse the decision which has been made - that decision will stand."