Fruit Of the Loom's three Irish directors, including managing director, Mr Willie McCarter, are understood to be close to a financial settlement under which they will agree to leave the company. Sources close to the negotiations were optimistic last night that the dispute between the US multinational and managing director, Mr Willie McCarter, sales director, Mr John McCarter, and finance director, Mr Seamus McEleney, will be resolved ahead of tomorrow's High Court application for an injunction.

Legal and accountancy consultants, acting for the three directors, were last night going over the details of a fresh redundancy offer made in the past few days by the US multinational.

The directors, who have been negotiating a severance deal with the company since last June, had applied to the Dublin High Court to an injunction to block their removal from the company, due to be heard tomorrow.

The three men, who have been negotiating with Fruit of the Loom and its group chairman and chief executive, Mr Bill Farley, for a lengthy period, are being made redundant as part of a restructuring of its European operations.

Over the months, it is believed that a number of severance options were put to the directors, including a recent offer, which is believed to be worth over $1 million (£680,000) between the three.

However, this offer was rejected and it is believed the talks were only restarted again in the past week.