The decision to give the green light to the proposal is expected to receive a broad welcome from business interests and the general public who for years have campaigned for this type of mixed-use development in the town. Local builders Michael Kelly Senior and his son Michael Kelly Junior have expressed "delight" at the council's decision to sanction their proposed complex which had been objected to by developers with alternative plans for commercial schemes in the town.

Anxious traders along with business people and local residents have for years argued that the town needs the kind of commercial boost this new shopping complex is expected to provide. Last year, 2,500 local people signed a petition calling on An Bord Pleanala to facilitate and promote commercial development in the town. A public meeting called to discuss the issue attracted 1,200 locals, with many people voicing concerns about the motivations of some of those lodging objections to specific developments.

The approved plans include large spaces for anchor units at each end of the development with smaller satellite retail units in flexible configurations in the centre. The developers promise spacious two- and three-bed apartments with dedicated car-park spaces, lift access and some of the finest views over Donegal Bay. According to the Kellys, they have already received a number of inquiries from retailers interested in acquiring space in the scheme which is expected to be completed by early 2009.

"We have put a lot of work into this scheme to ensure that it will be a development worthy of Donegal town, " says Tony Carr of Carr and Company, architects, who designed the scheme. "As a town-centre development it ticks all the boxes of our national planning policy whereby town centres are to be reinforced with new development instead of being eroded by relocating retail, commercial, community and residential developments to peripheral locations outside our towns.

"The location of the scheme provided a particular challenge for our design team. In relation to the footprint of the existing town centre it's a big development.

The planners were very insistent that the development should complement the town's existing architecture and I think we've managed to achieve that aim."

Meanwhile, Keeney Construction is expected to begin work soon on a retail, residential and office development planned on the site of the old Magee clothing factory in the Milltown area of the town. A third development company, Bennett Construction, owns three prime sites in the town for which it too hopes to win planning approval for commercial and residential schemes.

"The town-centre development is welcome news on several fronts, " says local Fianna Fail county councillor, Jonathan Kennedy. "The fact that it's a local builder employing local labour who's involved in the development will mean the creation of up to 60 or 70 jobs during the construction stage. The substantial parking planned for the development is something that's been badly needed for a long time. The new cinema will be eagerly anticipated as we don't have one in Donegal town at the moment.

And once we get up and running on the retail aspect of the development we'll be able to create and retain a significant number of jobs."