Diageo has announced plans to invest £520m in building a new Guinness factory in Ireland and rejuvenating its world-famous St James's Gate brewery in Dublin, ending fears it would close the historic site.

Work on both sites is set to be complete by 2013 with the St James's Gate brewery focusing on the Irish and British markets and the new factory, outside Dublin, concentrating on global exports.

As part of the plans Diageo is set to close its breweries in Kilkenny and Dundalk. The planned closures angered the Guinness Staff Union. However it has called off a ballot for strike action after progress in redundancy package talks.