Unemployment: Theme in Sheffield-based film The Full Monty

No location has yet been specified for its Sheffield operation but it is hoped the investment will raise South Yorkshire's gross domestic product by �50m a year by 2007.

Sheffield Council's chief executive Bob Kerslake said the announcement was a "proud day" for the city.

"Sheffield's turned the corner. We're attracting world-class employers drawn by the skills the city can offer," added Mr Kerslake.

Trade and Industry Secretary Stephen Byers described the news as "a major jobs boost, not just for Sheffield, but for the whole country".

High unemployment

He said the development was an example of the Department of Trade and Industry's (DTI) regional jobs policy.

Stephen Byers: Boost for whole country

Unemployment in Sheffield provided the basis for the hit film The Full Monty, in which a group of out-of-work men cause a sensation by performing as a striptease troupe.

Sheffield beat off competition from Dublin and the Netherlands for the jobs.

Mike Gumbert, president of Insight Direct Worldwide, said: "We are excited to be part of the Sheffield community and we also look forward to continuing development of our high-tech businesses throughout the UK and continental Europe."

Insight Enterprises designs and markets specialised computer system and IT solutions for businesses.

It was founded 10 years ago by brothers Eric and Tim Crown with a $2,000 dollar (�1,300) advance on a credit card.

It now has a turnover of $2bn (�1.3bn) and employs 3,400 people worldwide.

Regional development agency Yorkshire Forward's chairman Graham Hall said Insight would have a huge impact on the region, helping to "reignite" the South Yorkshire economy.