Greencore has asked officials in Carlow County Council to consider rezoning the 290-acre site of its former sugar factory in Carlow, a move with the potential to bring in a significant windfall profit for the food group.

The site has a current value of some €40 million on Greencore's books and it would be worth many multiples of that sum if a new Local Area Plan was approved for the area.

Greencore's contacts with the council are being managed at a very high level in the company. News of the approach to the council comes as the group claims the rights to most of a €145 million EU compensation package for the reform of the sugar industry.

While Greencore would profit on the double if the Carlow site was rezoned and it won the share of the EU package that it claims, the Irish Farmers' Association has claimed that it should receive the bulk of the compensation. Others, including Irish Sugar pensioners and sugar beet contractors, are also claiming the right to compensation.

Greencore's spokesman said that the group's focus was on the "remediation" of the factory and the resolution of environmental issues. "There is no application to Carlow County Council."

However, a spokeswoman for Carlow County Council indicated that the group's contacts with the council went beyond discussion of the remediation process. "The council confirms that it had been asked by Greencore to consider the making of a Local Area Plan in respect of the area," she said.

"The council's focus at this point in time is on the remediation of the lands. Greencore have made preliminary approaches to Carlow County Council in relation to remediation and the council understands that investigations are being undertaken by Greencore in relation to the environmental and engineering issues arising."

The request to make a new Local Area Plan comes less than two months after Greencore chief executive David Dilger referred to the site's development potential with stock market investors in New York. Mr Dilger said at a conference organised by Davy Stockbrokers that the property could attract multiples of its €40 million valuation if sold.

Local sources said Greencore was examining the possibility of securing mixed-use zoning for the site, which would clear the way for residential and commercial developments. The group has engaged Arup consultants to advise it on the plans, they said.

But while Greencore would need the support of county councillors in Carlow to secure rezoning, one Fianna Fáil councillor said yesterday that no approach had been made to elected representatives on the council. Mr PJ Kavanagh, who is a farmer and beet grower, said he was prepared to support a rezoning application, but only if Greencore withdrew its claim for EU compensation.

"The first I heard of Greencore being in contact with the council was at last Monday's meeting when the manager informed us that he had been in discussion with members of the board of Greencore," he said.