US group Cardinal Health has postponed for two years a project which would have created 1,300 jobs in Longford.

The Ohio-based group said in a statement it had decided to postpone further development in Longford because of "necessary changes in the company's business priorities".

Mr George Fotiades, president of Cardinal's pharmaceutical technologies and services division said his company had recently expanded its pharmaceutical operations through acquisitions.

"We must now focus on consolidating these businesses into Cardinal Health's corporate operations on a global basis," he said.

"This effort requires us to re-order certain priorities, including Longford, to maximise the benefits of these acquisitions."

Cardinal is still committed to the Longford project in the longer term, Mr Fotiades added.

The Tánaiste and Minister for Enterprise, Trade and Employment Ms Harney said she is still confident the project will go ahead, albeit later than planned.

"While I am obviously disappointed that this important investment for the Longford area is to be deferred in the short term, I am confident following my discussions with the IDA that Cardinal Health continues to be strongly committed to the expansion of their business to Ireland," she said.

"I want to assure them and the people of Longford of my continued interest in this project and guarantee them the continued assistance of my Department and the IDA that the commencement of this planned investment advances as soon as possible."

Originally, construction at the site was due to commence before the end of 2002. The facility would have operational in 2004 and 1,300 jobs created by 2007. The company distributes healthcare products and manufactures a range of drugs.

The IDA was informed almost two weeks ago that the project was to be deferred. IDA chief executive, Mr Sean Dorgan, met with Cardinal Health during a US visit and during a review meeting was informed a decision had been taken to put the project on hold.

IDA spokesman Mr Colm Donlon said while the IDA had not yet invested any money in the project it had "taken up a considerable amount of time".

The agency would continue to consult with the US group on an ongoing basis and when Cardinal decides to invest again the IDA "will make sure Longford is back in the picture". In the meantime a 48-acre IDA backed business park in Longford would be fast-tracked.