Mitchelstown's industrial base must be diversified, according to the Minister for Enterprise, Trade and Employment, Mr Martin. He was speaking after meeting business and community representatives to discuss recent job losses at the Dairygold plant in the town.

Mr Martin also met Dairygold management and said he had asked them to discuss with the Government any future plans they have so that State agencies such IDA Ireland, Enterprise Ireland and FÁS could plan accordingly.

Mr Martin said Mitchelstown was very dependent on the agri-food sector and recent job losses at Dairygold highlighted the need for diversity. The arrival of broadband in the town would be an important boost, he said.

He also called for greater communication between Dairygold management and staff. The general economic backdrop today was far more positive than in the 1980s when other towns were hit with similar job losses but managed to recover, he added.

Mitchelstown Business Association chairman, Mr Tony Lewis described the meeting with Mr Martin as "useful" and said they were able to convey to him "a flavour of the anger in the town" at the loss of jobs in Dairygold and the company's plan to move its administration to Cork city.

"We're quite pleased with the meeting - he's the first minister to come down to Mitchelstown and see for himself the impact the closure of the pig-processing plant and the rest of Dairygold's rationalisation has had on the town and the surrounding area," said Mr Lewis.

SIPTU regional secretary, Mr Gene Mealy, said he and other SIPTU and Mandate representatives were pleased to have had an opportunity to outline to Mr Martin the concerns of their members over the loss of jobs at Dairygold in both Mitchelstown and Mallow.

Mr Mealy said that they outlined concerns about how north Cork was in danger of becoming a serious economic blackspot with the loss of 900 jobs in Dairygold, and the loss of 57 jobs at Nestle in Mallow when the company closes its chocolate crumb plant in March 2005.

Meanwhile, Dairygold has started the process of taking legal action against Nestle, saying the company did not accept that Nestle was entitled to implement its decision to close the Mallow plant and that it would seek an injunction against Nestle.

Neither side would comment on the matter yesterday. However, The Irish Times understands that issue may relate to the period of notice that Dairygold claims it is entitled to receive from Nestle before terminating the contract for the purchase of 80 million litres of milk from the dairy co-op.