The Tanaiste, Ms Harney, has conceded that up to 700 jobs could be lost within T-shirt production sectors of Fruit of the Loom plants across Co Donegal.

As fears for the future of the company grew, the Tanaiste had face-to-face talks with workers in production plants in Raphoe, Buncrana, and Milford yesterday.

In response to local concerns over the lack of job creation locally, she also announced she was establishing a jobs task force for the county.

"We have to be realistic and while I cannot put a specific figure on job losses, I fear we may be facing up to 700 redundancies in the T-shirt sector locally. Hopefully these losses will not occur this year," she said.

She added: "We need to minimise these job losses and examine areas of job creation. It is now my intention to set up a jobs task force for the area which will take immediate effect. I will be meeting with all the necessary agencies in an effort to minimise these losses and negotiate proper redundancy packages."

However, Letterkenny Urban District councillor Mr Jimmy Harte described the Tanaiste's pledges as too little too late.

"We wrote to the Tanaiste a year ago expressing our concerns over the lack of job creation locally and calling for a job task force to be set up. However, our calls fell on deaf ears. I am afraid this may be too little, too late," he said.

It is expected that Fruit of the Loom will move the T-shirt operations to Morocco next year where the average weekly wage is just £40 per worker, compared to more than £200 per worker per week in Donegal.

With unemployment figures running at twice the national average in Co Donegal, there is renewed pressure on the Ms Harney to address what many perceive as a crisis situation.

"Donegal has one of the highest levels of unemployment in the country and with over 800 jobs in jeopardy at Fruit of the Loom, it is essential that new industry is attracted to the north-west," said Mr Tommy Broughan, Labour Party spokesman on Enterprise, Trade and Employment.

Mr Broughan welcomed the decision to set up a jobs task force for Donegal but said there was also an urgent need to ensure that indigenous industry received the support it needed.

"The growth of self-employment and small and medium enterprises is crucial to the Irish economy and in particular Donegal at this present time," Mr Broughan said.