Tesco Ireland has been pressing its UK suppliers for price cuts to take account of the fall in the value of sterling against the euro, according to company spokesman Dermot Breen.

A number of meetings had been held on the issue and about half of all suppliers have agreed to adjust their prices, he said. As a result, 1,250 prices had been reduced in Tesco's 105 stores across the Irish Republic in recent weeks.

Tesco, M&S and other British-based multiples have been accused of ripping off Irish consumers over the currency differential. In parliament, Labour Party leader Eamon Gilmore claimed that at a time when sterling had fallen by 20% against the euro, Tesco was charging up to 50% more for groceries in the Republic than at its UK stores. Such prices were "inexplicable", he said.

Taoiseach Brian Cowen, under pressure over a 5% inflation rate - double the EU average - and the opening of national wage talks, said his government was writing to the multiples involved, seeking an explanation for current price levels. He warned that action would be taken "if the replies are not what we expect to hear".

Tesco Ireland is understood to source about a third of its goods from the UK. Breen said it was dependent on suppliers passing on the sterling differential. About half had agreed to do so while half had not. He declined to identify which, but said the refusal "affects the relationship".

Tesco, conscious of consumer anger and political pressure over the prices issue, has been running full-page advertisements in the Irish national press announcing "over 500 new price cuts this week" and "over 1,750 long-term price cuts so far this year". The cuts cover items from groceries to toiletries and, Breen said, "there are a good few more to come".