Donegal's already devastated textile sector suffered another severe blow yesterday with the announcement of the closure of Jay Bee in Carndonagh, with the loss of 114 jobs.

This latest news, following more than 1,000 redundancies in the clothing industry in the county over the past 15 months, came on the eve of a visit by the Tanaiste.

Ms Harney is today expected to give details of up to 200 jobs in Donegal to be provided by several Irish-owned companies.

Workers at the Jay Bee factory were shocked yesterday at the announcement. They said the first they heard of the threatened closure was on local radio at lunchtime. They described their future as "bleak" given that another clothing factory, Dromont, closed in the town before Christmas with the loss of 50 jobs.

Jay Bee said in a statement that "owing to difficult market conditions and low cost competition" it had no option but to close the plant. The redundancies will be implemented on a phased basis between mid-March and mid-April.

The plant has been in operation since 1959 and under the current ownership since 1974. The company said it had been supplying ladies blouses to many British stores but that this segment of the market had come under severe price competition from low cost imports, coupled with a declining demand for the garments. "It is no longer cost effective to produce these garments in Ireland," the company said.

Factory workers said they were told last Friday they might be put on a three-day week but were reassured on Tuesday that their jobs were safe. "We went home with our hearts a bit lighter, but now today we hear this. It really is looking bleak for us at the moment because there is no other textile factory left in the town," one worker said.

Employees at the plant are not unionised but workers said management had assured them discussions would take place on a redundancy package.

One of the announcements expected to be made by Ms Harney today concerns the former Fruit of the Loom plant in nearby Malin where Belfast-based Forward Emphasis is to set up a call centre. But contrary to earlier reports, just 20 jobs will be provided initially. Forward Emphasis said that about 120 people would be trained and that in addition to the 20 full-time staff, it was expected there would be a need for part-time staff and for people to work for short periods.