IN a £300m project a fleet of new generation British Army vehicles is to be created in the region after a North-East factory was commissioned to do the work, it was revealed last night.

BAE Systems in Newcastle will make 60 armoured Terrier vehicles, which will be used by the Royal Engineers and are said to be one of the most important weapons in their armoury.

And in a further boost to the North-East, one of the key suppliers to the project will be Astrum, based in Stanhope, County Durham, which will provide track and castings for the new vehicles.

The announcement was hailed last night as being good news for the North-East and for British industry.

Construction work on the new production line at the Newcastle factory, which employs 650 people, will begin next year, with the Terriers due to enter service in 2013.

The Terrier vehicles will support infantry by removing obstacles and opening routes, providing assistance on operations including conflict, peace-keeping and humanitarian missions.

The Terrier has recently been redesigned by the Ministry of Defence (MoD) to have additional protection against mine attacks, making them an important tool in areas of conflict.

Quentin Davies, Minister for Defence Equipment and Support, said the deal is important for the UK.

“The Terrier will be a hugely powerful and versatile machine- like a cross between an armoured vehicle an excavator and a loader – and I am pleased to confirm this order for our highly-skilled Royal Engineers who provide vital battlefield support to the infantry and frontline troops,”

he said.

“Designed in Leicester and integrated by BAE Systems in Newcastle, the order is also good news for British industry, as more than 90 per cent of the manufacture will be supported by companies from across the country, demonstrating the great level of skills and workmanship which we have in the UK.”

It is the latest boost for BAE, which last month announced a 31 per cent rise in annual earnings for 2008 on the back of an increase in military spending.

The group’s order book grew by 20 per cent, with significant orders including the 15-year munitions deal won by its plant in Birtley, County Durham, which safeguarded the jobs of its 330-strong workforce throughout the period.