Three hundred jobs will be lost within the next six months at Fruit of the Loom's plant at Ballymacarry, Buncrana, Co Donegal. The news has come as a major surprise to the workers at the plant.

The company holds responsible continuing high production costs in Ireland and says the decision was "an economic necessity".

The plant will close in two stages: 170 jobs will go in November and the remaining 130 will lose their jobs next March. Employees will be offered the same severance package given to workers who lost their jobs last year.

The company, which currently employs just more than 1,000 people in Donegal and Derry, says that sewing plants in Northern Ireland will not be affected.

Much of the company's work is now being carried out at factories in Morocco.

The chief executive of IDA Ireland, Mr Sean Dorgan, who was in Donegal yesterday, expressed "disappointment" at the timing of the announcement.