Louise Walsh's next sculpture will celebrate the women of Derry's shirt factories. It's an imaginative change for the city, writes Susan McKay

There will be a huge sewing machine, the black metal wheel of which is embedded in the earth in the centre of a roundabout, with a thread stretching from the ribbed body of the machine across the road to the needle. Above the needle rises a tall steel template, like a banner, with the pieces that make up a shirt cut out of it. The needle will be sewing a shirt which is literally part of the landscape. It will be sculpted in the grass-covered earth, its folds softly falling down the mown slope toward the River Foyle.

"I wanted it to be big," says Louise Walsh. "I wanted it to be massive to show the extent of the contribution these women made." She's talking about the sculpture she is to build to celebrate the lives of the women who worked in Derry's shirt factories. Her proposal has just been accepted by the North's Department for Social Development and Derry City Council, which jointly tendered for the work.

Walsh has been interested in making a piece like this for years. In 1990 her proposal for a piece based on shirt factory workers was shortlisted in a competition to design a sculpture for the space at the city end of Craigavon Bridge in Derry. That competition was won by local art teacher, Maurice Harron, whose two figures reaching out to hold hands across the divide has frequently been used as a symbol of the peace process.

While preparing her proposal in 1990, Walsh had spent time in a Derry shirt factory, working on a series of life-size charcoal portraits of women at work there. These strong works are reminiscent of the drawings of Kathe Kollwitz. "The crack and the carry-on among a lot of the women was incredible," says Walsh. "There was a great camaraderie. They were hilarious. They'd go out on the razzle in big groups and the way they could drink was unbelievable. They'd talk about going out 'man-hunting' and they told me there used to be a saying when the American sailors would land at the Docks during the second World War - "ships in, Tillie's out". They were outrageous women. And they were the breadwinners for their families."

Tillie and Henderson's, built in 1857, was, by the turn of the last century, one of the largest shirt factories in the world. Pay and conditions were bad, and Karl Marx's daughter, Eleanor, visited Derry in the 1890s to help recruit the workers to trade unions. There were more than 40 factories in the city, and when the industry peaked in the 1920s about 18,000 people were employed, most of them women. Some of the vast redbrick factory buildings have survived, though the industry has steeply declined.

When she went back last year to work on ideas for her new proposal, Walsh got the Derry Journal to publish a photograph of a group of the women she'd met in 1990, asking them to contact her.

"Some of the women have retrained as nurses or gone back into education. They still have a big emotional attachment to their days in the factories. A lot of them still meet every Friday night for a drink, and women talk of friendships forged in the factories that have lasted lifetimes.

"In many families, several generations of women worked in the factories. One Catholic woman told me she took to going to Protestant dances with her friends from the factory and she met a Protestant and married him. I asked the women to tell me stories about their lives. I want there to be a big conversation going on about this while the piece is being made."

The label of the shirt on the raised earth collar, 10 metres wide, will be a large metal plaque, and there will be text engraved on this. Walsh wants women to work with her on what it should say, and to come up with a name for the piece.

Walsh is best known for her "monument to the unknown woman worker" in Belfast's Great Victoria Street. This powerful work consists of two female figures, an older and a younger woman, with items associated with low-paid women's work embedded in their bodies - a typewriter, a shopping basket, a phone. One of the women may be a prostitute. For the Derry piece, Walsh didn't want to take a literal, figurative approach. "Traditionally, women's work has been devalued and part of that is a tendency to associate female work with our bodies," she says.

The piece will mark an imaginative departure for Derry. Most of the city's public sculptures are currently figurative - from the fierce, bayonet-wielding figures on the War Memorial in the Diamond, to the Harron piece, to the Janus-like Anthony Gormley figure on the walls and Eamon O'Doherty's emigrant figures making their way from Waterloo Place to the Docks.

Walsh got to choose her site, and selected a prominent position including the main roundabout at the entrance to Derry from Belfast, and the slope down to the railway line and the river.

The site commands a wonderful view over the city and the Donegal mountains. "The sculpture is very see-through, but it will help alleviate the current view of Marks and Spencers," she laughs. IRA bombs left much of Derry in ruins, and poor redevelopment means the riverfront is now hideously dominated by supermarkets.

Born and brought up in Cork, Walsh went to art college there and then, in the mid 1980s moved to Belfast to do an MA. She stayed for five years. Her woman worker sculpture embroiled her in controversy, when the City Council banned it. Biblical Unionists objected to her depiction of harlots, though the Council had in fact required the piece to focus on prostitution. Sinn Féin supported Walsh and a fierce debate ensued. In the end, it was the Reverend Ian Paisley who made sure Walsh got paid. "I was totally unprepared for the sectarian politics," she says.

Burnt by the experience, she moved to Limerick. A private company later contracted the piece. Also in Belfast, her "serpent on the staff", a symbol of healing, coils around pillars in the new entrance to the Royal Victoria Hospital.

Walsh now lectures at the National College of Art and Design in Dublin (and vehemently opposes the proposed move out of the city). After years of tendering and being turned down, she is dizzyingly busy on several new projects. Asked to tender a design for a wall at the Luas stop between St James's Hospital and the Mary Aikenhead flats, Walsh proposed a complex training project involving local youth workers, her NCAD art students and local schoolchildren.

There will be a "love seat" along a long curved railing, the pillars of which will feature a series of sculptures. These, dragons and griffins and other strange and fabulous creatures were designed and made by the children and teenagers. They will be, says Walsh, "astonishingly beautiful".

"There's this big thing about the genius of the artist," she says. "I'm more interested in the public and its interaction with my work. I've always considered myself a feminist and I'm very socially engaged. I want to create work that allows for a genuine participation, that gets people to look at their own place in culture and things that happen in their environment. I want my work to work for the people who live with it."