SINN Féin have written to the Secretary of State claiming he is breaching the Treasury's own funding policy by refusing to pay for injured victims' pensions.
The Northern Ireland Office and the DUP, have accused Sinn Féin of blocking the pension payments by refusing to nominate the Justice Department to oversee the scheme where the cost would be met by Stormont.
However, a letter send by Finance Minister Conor Murphy to the secretary of state yesterday claims that the government is breaching its own Treasury guidelines which state "the body whose decisions cause the additional cost will meet that cost".
It is understood that senior party officials held a "heated" meeting yesterday during which they expressed anger that the Northern Ireland Office (NIO) was refusing to take responsibility for the scheme.
Sinn Féin argues estimated costs for the pension have escalated after the criteria was changed by the NIO from the most serious injuries to include a range of additional criteria, including psychological injury and transfer of the pension to a spouse or carer for up to ten years after the death of the victim.
The proposed Northern Ireland scheme will also now extend to victims living in Britain and Europe, including former British soldiers, and people injured during the Troubles who have since moved to other countries.
Guidelines for the administration of the scheme are expected to be made public this week but a draft of the proposals has already been leaked.
Under the revised draft guidelines former prisoners who served more than 30 months could be refused a pension.
The judge led panel can also use other "material evidence" to reject applications in "exceptional circumstances".
Sinn Féin and a number of victims' groups have argued that this could amount to intelligence reports being used to deny some pensions.
The NIO maintain only those injured by their own actions will be excluded and that others with convictions can apply and the panel will assess their eligibility on a case by case basis.
In a letter sent by the finance minister to Mr Lewis states: "I recognise the decisions in question were taken by the Secretary of State at a time when Executive ministers were not able to make decisions on devolved matters.
"However, it is important to distinguish between the decisions required to ensure continuity of service and those which introduce new policy".
Speaking about the pensions controversy in the Commons yesterday Boris Johnson said that the pension was a "fair, balanced and proportionate way" of helping all those who suffered in the Troubles.
In response to a question from DUP, MP Jeffrey Donaldson, the prime minister added: "It's very important that Sinn Féin along with all other parties allow the scheme to go forward as soon as possible".
