ALLIANCE's Stephen Farry last night said a two-year cap imposed on holiday pay for civil servants in other parts of the UK would have been "counter-productive" if introduced in Northern Ireland.
Mr Farry has admitted it was his decision not to introduce a cap to protect taxpayers from backdated pay claims.
The British government capped backdated claims in order to stem potentially huge bills to employers.
But questions have been raised about why Mr Farry did not introduce a similar practice in the north.
It comes after it emerged government departments in the north could be hit by backdated holiday claims following a successful legal challenge by PSNI staff.
It found that workers were owed money for a shortfall in pay going back two decades.
Stormont's Department of Finance said it was considering how the ruling would affect other workers with reports individual payments could total £40 million.
In 2014, the British government faced a similar court ruling, which led to a two-year cap being introduced.
DUP assembly member Jim Wells has questioned why Mr Farry had not implemented a similar cap.
Mr Farry had responsibility for salary policy decisions as employment and learning minister at the time.
He initially said he was aware of the 2014 ruling and had a "number of discussions with civil servants regarding the potential implications for Northern Ireland".
In a new statement last night, he said he acted honourably and with integrity.
He said a draft consultation was prepared in August 2015 "regarding the potential introduction of a cap in Northern Ireland".
"...but after reflection and further discussions with officials, I ultimately decided not to proceed," he said.
The Alliance MLA added that there "could have been potential equality implications" and "indications were also given that the two-year cap was potentially illegal".
"It was unlikely any consultation and subsequent draft legislation would have been cleared by the Executive and then the Assembly," he said.
He added: "Ultimately, it was my judgement a two-year cap on payments in Northern Ireland was counter-productive".
