The proposed tax, which is being sought by Dublin Corporation to fund improvements in the city's amenities, would apply to people from all over Ireland as well as from abroad.

It is being considered by the Department of Tourism, which is also examining a proposal to charge all tourists from overseas an "entry fee" of £3 into the Republic.

Dublin City Treasurer Michael Redmond defended the controversial tax today.

He said it would be similar to a hotel tax charged in major cities in the US and other European countries, and was necessary to provide resources for funding tourist attractions, Millennium projects and for cleaning the city.

He denied that it was an "access" tax or that it would deter visitors.

He said the proposed £3 a night extra charge on guests in hotels, guesthouses and bed and breakfast accommodation would be limited.

If someone was staying for a fortnight they would not have to pay £42. It would be pitched in such a way so that the maximum would be about £10 per stay.

John Power, chief executive of the Irish Hotels Federation, said the Corporation's proposed tax on visitors would be disastrous.

"We will fight it tooth and nail", he pledged.

He said if the Corporation wants to kill tourism in Dublin, they are going about it the right way. "Such a tax would put people off coming to our capital city."