Just two weeks after game-changing deals announced in the North East, MPs have warned that ambitions for more electric car battery plants in the UK could “reach a dead end”.

A Government scheme expected to support the establishment of so-called gigafactories is “insufficient”, the Environmental Audit Committee warned.

The Automotive Transformation Fund is worth just £500 million, but a single gigafactory could cost between £2 billion and £4 billion to set up.

The EAC has heard evidence that governments in other European countries are supporting factories with £750 million each.

In recent weeks planning approval has been granted for Britishvolt’s gigafactory at Blyth, Nissan has said it will make a huge investment in battery-making at Sunderland and there are plans for another site at Coventry.

An estimated five more are required by 2027 to meet ambitions for the production of battery electric vehicles in the UK for sale in domestic and EU markets, according to the EAC.

Tory MP Philip Dunne, who chairs the committee, said recent announcements about the two North East gigafactories are “clearly welcome” but for the UK to reach net zero carbon emissions “we still need to take it up a gear”.

He said: “We doubt the £500 million Government funding left in reserve for automotive transformation will be sufficient to secure the additional 100 gigawatt hours of gigafactory output needed for the UK electric vehicle sector to reach its full potential.

“Without further Government support, establishment of the sector in the UK will reach a dead end.”