Fruit of the Loom has strongly rejected claims that hundreds of jobs at its factories in Ireland are at risk. "The only jobs that are at stake are those of the three directors who have received redundancy notices," a spokesman said yesterday. A spokesman said the company wished to reach an amicable settlement with the three directors. It remained committed to its Irish operations, he said, and was appalled "at the media campaign being orchestrated against the company".

This latest statement offers reassurances to its 3,500 workers in Donegal and Derry who return to work today after a three week holiday. The group's senior US executives are also said to be extremely annoyed at some of the speculation and media reports that have emerged during its dispute with managing director, Mr Willie McCarter, sales director Mr John McCarter, and finance director, Mr Seamus McEleney. The spokesman added that the company had written to the Tanaiste and Minister for Enterprise and Employment, Ms Harney, to express its "deep concern" about being described earlier this week as a "fly by night" operation.

This comment was made by the Minister for Tourism, Sport and Recreation and local Donegal TD, Dr Jim McDaid, last week. He later retracted this statement, saying it was not specifically directed at Fruit of the Loom. But he insisted that he remained concerned about the long term prospects for the workforce. Reports that the group could transfer some of its manufacturing operations to a cheaper location, as it has done in some cases in the US, has fuelled speculation about the security of between 800 and 1,000 sewing jobs in Buncrana.

Fruit of the Loom is known to have commissioned accountants, Coopers & Lybrand, to prepare a report more than two years ago on the potential financial impact of moving some of the Irish operations elsewhere. The report, seen by The Irish Times, was prepared in 1995 as part of a proposed worldwide rationalisation review throughout the Fruit of the Loom group.

The company had then considered closing one sewing factory in Northern Ireland and two sewing plants in the Republic with the loss of around 700 jobs. The consultants estimated, however, that Fruit of the Loom would incur financial penalties of up to $35 million to do this. The bulk of these costs related to financial penalties of $28.5 million which the company would have to repay to the Irish and British industrial development agencies against total grants of $100 million the company received from IDA Ireland, Udaras na Gaeltachta and the Northern Ireland Industrial Development Board, since 1987.

It would also be forced to forego a further $7.2 million in future grants and subsidies. Due to the substantial costs involved, the company is understood to have shelved its plans to transfer these operations to cheaper locations as Albania and the Carribbean.