Nissan has announced it is to build its electric Leaf car at its Sunderland plant in north-east England.
The Japanese car maker has described the Leaf as the worldÔÇÖs first affordable, mass produced zero emission car.
The decision to make Sunderland one of its three global manufacturing locations for electric vehicles will, along with its nearby lithium ion battery plant, maintain around 2,250 UK jobs at Nissan and across its UK supply chain.
Around 50,000 Leaf cars will be manufactured at the Sunderland plant each year, starting in 2013.
Production of the Leaf forms part of a £420 million investment in electric cars by the Japanese firm. This is supported by a £20.7 million grant from the UK government and a proposed finance package of up to £197 million from the European Investment Bank.
Nissan said construction of its Sunderland battery plant will begin next month. With a capacity of 60,000 units a year, it will start making batteries in 2012 for both Nissan and its alliance partner Renault.
Founded in 1984, Nissan's Sunderland factory employs around 4,000 people. It built its five-millionth vehicle in June 2008.
Nissan has already announced that production of the Leaf will also take place in Oppama, Japan and Tennessee in the US, with the car due to go on sale at the end of this year.
The company has not yet revealed how much it expects to sell the car for, saying only that it will be competitive with similar-sized cars with conventional engines.
Commenting on the news, the UK's business secretary Lord Mandelson said: "This investment is a fantastic vote of confidence in the Sunderland plant and its excellent workforce. The automotive sector is of key importance to the UK. It supports R&D, technological innovation, skills and a supply chain that's a mainstay of the wider manufacturing sector.
"Today's news from Nissan, with support from government, shows that by working together we can achieve our aim of making the UK a world-leader in ultra-low carbon vehicles."
Andy Palmer, senior vice president at Nissan, added: "The world is at the dawn of a new era in automotive transport. Nissan LEAF, which will go on sale later this year, is a five-seater hatchback that offers the same space, practicality and performance of a similar car in its class - minus the tailpipe emissions.ÔÇØ
He went on to say: "Thanks to the UK's firm commitment to a low carbon future in terms of infrastructure, customer incentives and educational programmes, Nissan LEAF will be built at Sunderland, making the UK the third country in the world to produce this revolutionary car."
The announcement is welcome news amid heightening fears that UK manufacturers are continuing to shift production to cheaper plants overseas. Manganese Bronze, the manufacturer of LondonÔÇÖs iconic black cabs, has recently agreed to sell a majority stake to the Chinese group Geely, as well as moving more of its production to China.
Manganese Bronze, which manufactures the cabs at its factory in Coventry, said it had suffered a 30 per cent fall in sales since the onset of the recession, which has had a damaging effect on profits.
