Brewer Guinness was prepared to drop associations with Ireland and promote itself as an English company during the Falklands crisis, state papers have revealed.

Drinks giant Diageo today reported profits in line with market hopes but said the task of improving sales in Europe remained its biggest challenge.

RUMOURS that Guinness was planning to wind up operations at St James's Gate, Dublin, and move its headquarters to the Park Royal Brewery near London were finally killed off this week with the news that the Park Royal operation is being closed down instead.

Diageo said it plans to move its Guinness brewing operations from London to Dublin, with the loss of around 90 jobs.