Pretty Polly has returned to Killarney with a promise of over 300 new jobs.

The clothing company's parent the Sara Lee Corporation is taking over the building once again to manufacture ladies underwear.

The former factory, which was close to being demolished, is being upgraded with a £14 million investment, the Tanaiste, Ms Harney, announced last night.

Former plant manager Mr Jerry O'Grady is also back in place as general manager for Sara Lee Ireland.

The news will be widely welcomed in the area which has felt the loss of the some 1,000 jobs which were once in place at Pretty Polly. Finding a replacement industry was part of the Government's promise to TD Mr Jackie Healy Rae.

Ms Harney said the firm will be recruiting 300 people over the next three years. Up to 200 people will be recruited over the next year. The key management team is now being put in place.

The IDA has been involved in intensive promotion and negotiation for a number of months talking to Sara Lee. At one stage a furniture manufacturer was close to taking over the factory but the return of Sara Lee to its own site was seen as preferable.

The Tanaiste welcomed the conclusion of the long negotiations. "Sara Lee is both a major investor and a quality industry from a leading company in globally branded products."

It is not clear how large the grants which have been delivered. However, the company will invest £14.8 million to establish a manufacturing plant for women's underwear. The new factory will be more high tech and very expensive technology imported from Israel is being used to manufacture the underwear.

The plant will manufacture a range of branded seamless ladies underwear for the European market.

According to the Tanaiste the project will inject up to £7 million a year to the local economy through spending on wages and services.

Jobs will be in dyeing, knitting, warehousing and distribution.

Sara Lee is a global manufacturer and marketer of brand name products in a range of sectors. Based in Chicago, the company has operations in over 40 countries and employs 139,000.

The new project in Killarney originated through the Sara Lee Branded Apparel division in Europe, which has its headquarters in Paris.