THERE was only on famous person in Dunlewy in the 1950s. He was Manus Ferry, weaver to the gentry. The landlords of the vast estates in this remote and wildly beautiful corner of north west Donegal came to the little homestead on the shores of Dunlewy Lough, where Manus and his brother and sister lived a life of simple self sufficiency, to see what Manus was weaving, and order a shooting jacket, or a ladys tweed suit. Otherwise, the ordinary people were anonymous.

An exhibition of old photos in Ionad Cois Locha - the visitor and community centre now based around the Ferry cottage - tells a story, as the display says, of the "utter destitution of this beautiful area under colonial rule". The community somehow survived famine, eviction, the importation of Presbyterian shepherds from Scotland to take over the mountains, and mass emigration. But by the 1940s the place was, in the words of a local doctor who surveyed it, "a district of elderly, single women living alone By 1970, the school had closed down. There was an ESB dam on the lake and a generating station, but the local cottages had no electric light or running water.

Visitors' came to the Guinness shooting lodge on their estate, to fish for salmon. But the people of Dunlewy had no visitors. They had no apparent future. The village is on a stunningly beautiful bend of the road from Letterkenny to Gweedore - a tourist route. But there was nothing for tourists to stop for.

But there were young local men working in England and Holland and Australia and America. They'd say to each other, getting up to go to work at 5.30 a.m., "if we were at home, we'd only be going to bed now One or two of them Seamus O Gallachoir, chairman of the Dunlewy Co-op, was one decided they'd do anything to live at home.

They would create jobs, if there were none there. But job creation is a slow and humble thing. They organised a local festival, and as an economy measure, they bought a marquee instead of hiring one. Then they got an old lorry and travelled around, hiring the marquee out. This was the first outside cash the people of Dunlewy brought in to their village.

NOW, the enterprise called Ionad Cois Locha is beginning to make a healthy profit, even after providing nine full time and 18 seasonal jobs. The transformation of the Ferry homestead to provide simple teaching about shearing and weaving and tweed, an adventure and play area for children, little attractions like a herb garden, and a comfortable visitor's centre with a big, high quality shop, has been helped in its last stages by grants from the International Fund for Ireland and assistance from other agencies.

But a long local commitment led to that. Local people began by doing up the old school as a community centre. They put a bit of heating in. There were farmers' meetings there, and ICA meetings and evenings of card games. The community had a centre; now it could get together to raise, barrow and apply for the money to buy the Ferry place and its land, down on the edge of the lake, and begin to develop it. Surveys of passers by had shown that a large percentage would stop if there was any reason to. The locals decided to create somewhere they, could have a cup of tea. And that took off.

Now you can sit at a pine table, beside a massive fire, eating perhaps a pork stir fry with rice, perhaps some of the featherlight scones run up in the kitchen by Marian, while you look out through the big window to where ducklings play under a little waterfall, and plump ducks and geese and peahen sit in the grass.

You can see past the sheep and the garden where they grow the rhubarb for the rhubarb tarts, to the lake. Once, there were only the fishing boats of the landlords on it. Now, a jaunty little pleasure boat takes visitors out on trips. Grainne slept there and Diarmuid there. Up there is the Poison Glen where no birds sing. That stone church was built for the Presbyterian crofters. See the slopes of Errigal - that there are no sheep? The soil is too shallow even for heather.

The Dunlewy people have built nothing modern. The old whitewashed stone buildings of the Ferry place are the pattern for anything new that has been built. The flowers in the herbaceous border are the usual local, garden ones. The animals kept around the place are local ones - two little snorting pigs, a pair of tame deer, donkeys, more hens. The Ferry cottage, with its worn loom, its homely kitchen with a cupboard bed for the old people, its huge Dancing at Lughnasa wireless and its hub for grilling the herrings that would come from nearby Gweedore over the fire - everything is the real, local, thing.

"We want to bring nothing foreign in," Seamus O Gallachoir says. "We're tourist oriented, but we want to use our natural resources.

Of course, development does change a place. The pub is gaining an extension with en suite bedrooms. There's a new petrol pump. There's a big, registered B&B. If the co op ventures into self catering, or a marble quarry or eels - and everything is under consideration - the infrastructure of Dunlewy will have to change. But the challenge is surely welcome in a landscape, which, as you come across Glenveagh and down under Errigal towards the lake, breathes a sad emptiness.

Dunlewy is very well known in community development circles, and it has won umpteen awards. Perhaps that is because, as well as being the success it is, it came from absolutely nothing, in a place whose name was hardly known.

When you go out on the boattrip the guide points out a tiny crannog in the lake. Thousands of years ago a small group - 12 or 15 people - would have gone out to it at night to sleep together, safe from anything that might be prowling on the land. The Dunlewy Centre has something of the same quality as the crannog. On a cold Irish day, with grey cloud sitting on the formidable mountains, you can go down there tar a bit of company and warmth.

Buying a nice bit of tweed in the shop there, or having a meal - the profit going into what you see around you - can be a most meaningful thing to do on your holiday in Donegal. At Christmas they have the Frankie Kennedy Memorial celebration there. To listen to the must authentic traditional music, in memory of that lovely man, in such a fine centre, would make you proud. The men who came back from emigration determined to make Dunlewy live have taken the past and transformed it.