An archaeological excavation is in progress on the site of Dunnes Stores' new headquarters development at the corner of Stephen Street and South Great George's Street in Dublin city centre.

The excavation, which was one of the conditions of the grant of planning permission, began some weeks ago following the demolition of corner buildings, and is scheduled to continue until shortly after Christmas with construction due to start in early spring.

The current demolition work has revealed the impressive sight of Dublin Castle and its gardens from Aungier Street and while the Castle may again be obscured by the Dunnes development, the company is planning to create a new pedestrian way into the castle from this part of the city. The other benefit to the area from the construction will be to revitalise South Great George's Street, which is slowly emerging from "eyesore" status.

Much of this resulted from property developers on both sides of the street closing up properties as they were acquired, pending the acquisition of neighbouring buildings which would eventually form the basis of a major redevelopment scheme.

South Great George's Street was one of Dublin's primary shopping streets until the closure of Todds department store in the 1960s. Dunnes Stores lodged its planning application with Dublin Corporation in August 1998.

In more recent years the street has begun to bounce back with the advent of enthic restaurants and cafe bars.

Under the current permission, which was upheld by An Bord Pleanβla, it is planned to redevelop a large section of the street as a new corporate headquarters with a retail element. The pedestrian link will run from a point opposite Fade Street to the Castle grounds, emerging near the Clock Tower.

While the original application was for widespread demolition, according to conditions imposed by An Bord Pleanβla, the main structures of numbers 47, 48, 49 and 50 South Great George's Street are to be retained.

Another condition imposed the omission of a planned fourth floor and the stipulation that plant and equipment should be relocated within the building.

With regard to conservation, the planning permission required that original features of the building be catalogued and removed intact to be offered to conservation societies, when the building itself was to be demolished.

The Dunnes redevelopment scheme, which was estimated at £20 million (E;25.4m) three years ago, might now cost about twice that. It will cover up to one-third of the entire frontage on the west side of South Great George's Street, running from Stephen Street towards Dame Street. Only one building in the block, the Long Hall bar, will be unaffected.

The retail element will include 13 shops on both South Great George's Street and Stephen Street. Dunnes plans to use the office blocks over the shops as a centralised headquarters for around 750 staff.

At the time of the application Mr Jimmy O'Connor, of architects Arthur Gibney and Partners, who designed the new 250,000 sq ft block, said more than 60 per cent of the facades would be retained and nothing of any architectural or historic interest would be demolished.

The area of South Great George's Street is thought to be archaeologically rich, given its proximity to Dublin Castle.