NISSAN unveiled an early Christmas present for its North-East workforce yesterday - a new model, a £95m investment and the promise of more jobs.

The decision to build the Micra C+C may also lead to more work for the award-winning Sunderland plant.

It comes at a time when the factory is suffering a bout of industrial unrest. Last month, workers threatened strike action for the first time in its 18-year history in a dispute over plans to move 60 jobs to Bedfordshire.

The decision to manufacture Micra C+C at Sunderland will bring new jobs to the factory - about 250 workers will be needed to build the vehicle.

A spokesman said some staff would be transferred from other departments, although he added: "There will be a significant number of new positions created."

Nissan is investing £95m in a new "factory-within-a-factory" to build the new model.

The contract was clinched with the help of a £3.26m Government grant and production is due to begin in autumn 2005.

The chassis will be produced on the regular Micra production line. The roof and boot lid will be manufactured separately for completion in a dedicated area.

The production facility has been developed in collaboration with Karmann, the celebrated German coachbuilder which is to set up its own satellite operation at Sunderland.

Nissan bosses hailed the decision as a testament to their North-East staff. The company said: "We could have built this car in Japan and shipped it to Europe. The fact that we didn't tells you volumes about the people we have in Sunderland."

The company's decision will also ease Government fears over Nissan's threat to cut back on investment unless Britain joins the euro.

If the Micra C+C is successful, it could lead to more models being produced in Sunderland.

Nissan is seeking to diversify its product range in the battle for sales and the new Micra C+C - a coupe that turns into an open-top model at the touch of a button - is the first in a new wave of cars aimed at niche markets.

Others to follow include a medium-sized 4x4 code-named Dunehawk and the Effis, an ultra small city car.