Tanaiste Leo Varadkar believed Owen Keegan's controversial letter about student accommodation was from satirical news website Waterford Whispers News.
The Fine Gael leader slammed the letter as "insulting" and said the Dublin City Council boss shouldn't have written it.
Mr Keegan has been highly criticised for saying in a letter to the UCD Students' Union President that the union should become developers to provide "lower cost student accommodation for its members".
Speaking on Newstalk this morning, the Tanaiste said: "He shouldn't have written that letter quite frankly.
"I don't want to slag him off because he is a capable manager and he's done some very good things.
"When I saw that letter I thought it was Waterford Whispers to be honest. I really didn't think that he actually wrote that letter and signed it.
"I thought it was kind of insulting actually and I think he should withdraw it."
UCD Students' Union has planned a protest outside Dublin City Council's offices at Wood Quay today in response to Mr Keegan's comments.
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