Elan, the publicly quoted drug company, is planning to spend some £100 million on a new corporate headquarters at UCD's Belfield campus. The company has reached agreement to build a 200,000 sq ft office and laboratory on lands which it will lease from the university at commercial rates, believed to amount to about £450,000 per year.

The agreement was described by spokesmen for both organisations as "purely a commercial arrangement". Elan is also believed to be investing about £350,000 in research programmes at the university.

While there will be some relocation from the company's existing headquarters at Lincoln Place in central Dublin, it is understood that the establishment of an expanded research laboratory will not affect workers at the company's site in Athlone, which is mainly a manufacturing plant. "The development will complement Elan's existing research facilities in Ireland," said a statement.

Elan plans to build a 100,000 sq ft building in the first phase of the project, which it expects to complete by mid-2002. It plans a further 100,000 sq ft in the second phase. Planning permission has not yet been sought.

The company will appoint an "internationally recognised firm of architects", believed to be from Britain, to produce plans for buildings "broadly sympathetic with the existing design of the campus". Although the deal with the firm of architects has yet to be finalised, a spokesman said Elan had completed consultations with a number of Irish and international architectural firms.

About 250 people, mostly scientists, will work at the UCD site. While some new jobs will be created in company's expansion of its research operations, a spokesman said this aspect of the development was at the planning stage only.

"This is a totally independent site and it will not form part of the college," he said. "We would be working with many in the university, which is quite normal." Elan's presence at UCD would help enhance synergies and co-operation between both, said a UCD spokesman.

He said the question of a potential conflict between the interests of a State-funded educational institution and a publicly quoted commercial company did not arise. "We wouldn't have done it if there was (a question of conflict). It has to go through the Governing Authority. It got an absolute endorsement from the Governing Authority."

The idea, he said, was an evolution from the concept of campus companies and privately managed incubation centres.

Founded in 1969, Elan employs over 1,000 workers in Athlone, at a research laboratory in Trinity College and in Lincoln House. The company is expected to spend $225 some million on research and development worldwide this year.