Unlike certain other Irish designers, Marc O'Neill is not instantly recognisable. Tall, slim, and wearing a navy double-breasted jacket and black denims, he cuts an unobtrusive figure among the weekday shoppers in Marks & Spencer. He's there to see how well the Dublin branches display the Autograph womenswear collection which he has designed for the past four years for the chain. There is an emphasis on navy and white, and he invites me to touch the fabric in a short, off-white belted trench coat. "See how the metallic thread gives it that crinkle look and holds the shape," he says.

Mention the name Marc O'Neill to most fashionistas and a likely response involves either reminiscences of a cherry-red wool coat or a 'What's he doing these days?' Ten years ago, at the height of the cherry-red wool coat period, the Enniskerry-born O'Neill was referred to as Ireland's most promising young fashion designer. His clothes were worn by everyone from Andrea Corr to Madonna, and with both a diffusion collection for A-Wear under his own name and the launch of an international couture range, it seemed like his fashion star was very much in the ascendant. Debenhams was scouting him as a hot name to add to its exclusive designer ranges too. But then it seemed the star faded from public view. What happened?

"When Debenhams asked me, it was a hard decision to make as I was still designing for A-Wear," he says. "I thought, foolishly, at the time that if I was also designing for a UK store, it would dilute my name too much. Obviously I regret turning them down back then." With his contract with A-Wear coming to an end, he wanted to concentrate on the more exclusive international couture market, and license his name to other lifestyle products in the manner of Dior or Chanel. It wasn't to be.

But as it turned out, he was contacted years later by Neil Hendy, former head of design at Debenhams, and now in the same post at M&S, who remembered the young Irish designer with a talent for smart tailoring. The high-street chain is now the quietly spoken 39-year-old's main employer. And he's not complaining. He's reluctant to name a particular 'ideal' woman he might have had in mind when designing the three key ranges within the collection, but at a push he says Gwyneth Paltrow has an effortlessly casual look perfect for the Weekend range, while Cate Blanchett is more a role model for the dressier main collection. The age profile is definitely 30s upwards. His female co-workers are mainly in their 30s too, he says, and seemingly not averse to a little home dressmaking. As are many of his women friends. "It might sound surprising, but they are buying sewing machines and customising garments in the way women would have done years ago."

O'Neill got his first sewing machine as a teenager – not unusual, as the rag trade was very much a family pursuit. O'Neill's great-grandfather, James Douglas, was a senator who was involved with the drawing up of the constitution, but he also had an interest in a drapery business in Wexford Street. The sign is still there on the street, says the designer.

At 15, O'Neill signed up for a summer course in pattern cutting and design at the Grafton Academy. Joining him there for a few weeks was his cousin, Rachel O'Neill, better known these days as celebrity cook Rachel Allen. Does he see his prolific relative much these days? "I can't keep up with her! I'm more likely to see Rachel on the television when I'm at the gym." As it turned out, fashion wasn't her forte, and at that stage it looked like O'Neill would concentrate his skills elsewhere too – in ceramics.

"I had plans on becoming a ceramicist and even exhibited some pottery at various events. But then I became intrigued by the whole process of dress designing, from the technical aspect to the final finishing. The following summer I spent in Ib Jorgensen's workrooms, working alongside seamstresses where everything was done by hand. That fascination for fine detail is something that stayed with me." Following his degree course at the National College of Art & Design, he did a post-grad at the De Montfort College in Leicester, where the focus was very much on the business side of fashion. After that came the contract from A-Wear. "I still owe a huge amount to Deirdre Kelly for giving me that opportunity and I stayed with the company for six years. And yes, I still get friends asking me when I'm going to design a red coat again."

Student fashion is often dismissed as too frivolous and not commercially viable, but O'Neill feels that is a mistake. He's currently in Dublin as one of the judges for the Nokia Young Fashion Designer Awards, with entries on exhibit today at the Powerscourt Townhouse Centre. "I was always encouraged to enter every competition when I was a student as it's a good way to get your name out there. I think people underestimate how talented Irish designers are. And you would be surprised just how many of them are behind so many famous labels. Suzy Menkes (fashion editor of the International Herald Tribune) recently said how she found these designers more interesting than the big household names – for the simple reason that more people wear their designs."

As someone who has lived in London for the past 10 years, what does he think of our dress sense now when he's on a visit home?

"It's very obvious that there is much more awareness of design, people are more widely travelled, and they have more choice. Thinking back to when I was growing up it was very different. I can remember my mother would hire a dressmaker to have things specially made, or if she had money, would go to Brown Thomas. There were a lot more of the smaller boutiques back then, and it is that hint of exclusivity I try to bring to the collections I design now."

But what of young women out on the city streets at night? Do they reveal too much, and dress in an overtly sexual way?

"I feel that's just rebellion. It's a reaction against their parents, to cause a little outrage. And that's always been there. In the 1960s when the mini-skirt was introduced, it was much, much worse. People were scandalised by short hemlines. And then in the l990s it was more androgynous, and that attracted criticism too."

He's been with his English girlfriend, Emma Elliott, for the past 13 years. She runs a company called Chalk PR and they met when she came over to launch the Mac range of cosmetics at Brown Thomas. Was it love at first sight? "Typically, I had a show on the following day and had to leave early to run back to the office. But we did get together again after that."

He mentions two of their goddaughters, Margo and Phoebe (eight and 12), during the conversation, saying they are already displaying a great sense of style. Would he like children of his own some time? He smiles. "We have five godchildren between us now, plus a much-loved dog called Caspar, so that's more than enough to keep us busy for the moment." There's his charity fund-raising too – he's competing in a triathlon in June, and before that there's a charity skydive and a charity abseil.

He sees London very much as home now, but as we walk up Grafton Street, he reminisces about the Dublin he used to know. "I used to have an office on Stephen's Green and would meet loads of people I knew walking down the street, or heading to the Coffee Inn or the Colony with friends. Now I'm unlikely to meet anyone on Grafton Street that I know. But every time I come back here I realise how much I miss Dublin, the people, the coastline. And even the Forty Foot. Come to think of it, with all those events coming up, I should get in some training and take a dip out there!"

And with that, Marc O'Neill disappears into the crowd, the unassuming Irish designer whose style is recognisable everywhere.

The Nokia Young Fashion Designer Award 2010 continues today at the Powerscourt Townhouse Centre