A Sinn Fein-led government south of the border would pose “a very high risk”, but the party’s powers are limited at Stormont’s institutions, Leo Varadkar has said.

The Irish premier was speaking about his warnings that a Sinn Fein government would “make Ireland broke again”, while also praising the return of powersharing in Northern Ireland.

Mr Varadkar has said his “abiding memory” from the trip was seeing the “powerful” appearance of NI First Minister and Sinn Fein’s Stormont leader Michelle O’Neill and deputy First Minister and DUP politician Emma Little-Pengelly on stage together, which was met with rapturous applause.

Asked whether that comment meant he had changed his party’s stance on ruling out going into government with Sinn Fein, Mr Varadkar said it “hasn’t changed our view”.

“We will co-operate with Sinn Fein and the DUP from time to time, particularly when it relates to issues to do with Northern Ireland, and that goes for all of the parties in Northern Ireland.

“But a coalition with Sinn Fein for us is simply not on the agenda.

“We believe their economic policies would send Ireland backwards, would make Ireland broke again.

“We believe that their foreign policy would take us away from being at the heart of Europe, would weaken our friendship with a lot of other countries around the world, would risk making enemies of our friends and I just don’t see how we could agree a programme for government when we fundamentally disagree on so much.”

Asked about their coalition partners Fianna Fail and their economic track record, he said: “We were able to agree a set of policies with Fianna Fail, when we formed the programme for government, that was in line with our economic approach and our financial approach. I don’t think that’d be possible with Sinn Fein.”

Asked about whether saying that Sinn Fein would “make Ireland broke again” is in conflict with efforts to encourage US businesses to invest in Northern Ireland, Mr Varadkar said there was a difference.

“I think there’d be a significant difference in having what would be a Sinn Fein-led government,” he told reporters ahead of the shamrock ceremony.

“Bear in mind, Sinn Fein in Northern Ireland is in a devolved administration with certain limitations on their power around raising revenue, for example, and tax, and also is part of a government of four parties in which they’re not the majority.

“What is at risk, what could happen potentially in the Republic of Ireland, is a Sinn Fein-led government in which they would be the dominant partners in the government and would therefore be able to set policy around foreign policy, the economy, trade, justice, and that’s a very high risk for our country, I believe.”