The future arrived in Ireland yesterday, according to the Taoiseach, as he formally announced the establishment of the Massachusetts Institute of Technology's Media Lab Europe in Dublin, an initiative that is likely to become as pivotal in attracting and retaining leading technology and Internet companies as tax incentives and intelligent graduates.

The £130 million (€165 million) unit will be a wholly independent spin-off of MIT's famed Media Lab.

As the centrepiece of a planned "multimedia village" of cutting-edge enterprises, it will bring together leading technologists, researchers, new media artists and students to conduct research that will form the basis of the commercial ventures and products of tomorrow.

"I believe we're bringing the future to Ireland," said the Taoiseach. He added that the multimedia village "would be a focal point for businesses engaged in multimedia and electronic commerce research".

Mr Ahern was joined by MIT Media Lab's director, Prof Nicholas Negroponte, who said that, although MIT had talks with Sweden, Germany, Denmark, Italy and Spain, they had chosen Ireland for Media Lab.

"They aren't as adventuresome, bold and aggressive as you are here," said Prof Negroponte, who referred to the lab as "our window into Europe".

He said Ireland had "an entrepreneurial resonance" that he felt would mesh well with MIT.

Running costs for Media Lab Europe are estimated at £130 million over 10 years, with most of the sum coming from private industry investment and £28 million from the Government. Mr Ahern and Prof Negroponte stressed that Media Lab would forge strong links with the existing education sector in Ireland and pursue collaborative research projects.

It is envisaged that the facility will work not only with third-level students but also those at primary and secondary levels.

The lab will draw about 50 per cent of its 200 post- and undergraduate students from Ireland, together with many of its instructors, some of whom will be involved on a part-time basis.

Degrees will be awarded initially in conjunction with another institution but Media Lab Europe hopes to give its own European Masters and PhD degrees eventually.

The first students and faculty will be recruited beginning in spring 2000.