Victims’ groups met with Mr Cowen and top government ministers at a meeting last night. They described themselves as "shellshocked" by the Government’s decision.
It is reported that former Mayor of Clonmel and Fianna Fáil councillor Michael O’Brien and a number of other abuse victims walked out of the meeting in disgust.
However, in a major turnaround, the Government has decided that the religious orders should now pay 50% of the cost of the long-term costs of religious abuse.
There was outrage in 2002 when former Education Minister Michael Woods agreed that the religious would only pay €135m of the €1.3 billion in compensation due to victims under the Redress Board.
The taxpayer was to pay the remaining 90%.
However, the Government revealed last night the religious will now hand over another €348.5m and another €200m at a later date so that they and the state take equal blame for not caring for the children properly.
According to the victims, Mr Cowen said they were retaining €238.5m of the €348.5m extra promised "out of a duty" to the taxpayer.
The €200m that they will receive at a future date from the religious orders will go towards funding the new National Children’s Hospital.
A maximum of €110m of these new funds will be put into a trust for victims of institutional abuse.
This trust will be used to fund counselling, health and any educational needs.
Last night, founder of Survivors of Child Abuse John Kelly said they estimate that each abuse victim will receive the equivalent of about €7,000 in health and education funding.
An independent panel assessed the financial state of the various religious orders and once again issued an apology to victims.
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