JAPANESE car giant Nissan today announced plans to create hundreds of new North-East jobs in a £200m investment to build batteries for electric cars.

Prime Minister Gordon Brown and Business Secretary Lord Mandelson visited the firm's plant in Sunderland, to hear the news, which gives a big boost to the UK's recession-battered motor industry.

The battery investment makes the Sunderland plant a contender for manufacture of the groups new greener electric vehicles.

The Prime Minister said: "Nissan's investment in a new battery plant and its hope to start producing electric vehicles here in Sunderland is great news for the local economy, creating up to 350 direct jobs and creating and safeguarding hundreds more in the associated supply chain.

"This investment is also hugely significant as we embark on Building Britain's Future, our plan for recovery and beyond powered by low carbon, high technology industries, products and services.

"Sunderland could now be a strong contender to produce electric vehicles for Nissan in Europe, and we will continue to work with Nissan to ensure this happens."

The Government said it was working with Nissan on supporting the investment by offering grants and loan guarantees, including support through its Automotive Assistance Programme.

Lord Mandelson said: "The North-East has distinguished itself as the first specialised region for ultra-low carbon vehicles. This is good news not just for the North-East, but for the whole of the UK, helping to attract foreign investment and securing UK's place as a global leader in hi-tech manufacturing and automotive industries.

"The collaboration between local businesses, universities and colleges will create a hub of expertise to boost innovation and accelerate business growth in this important area of green industry."

The Government announced plans to establish a Low Carbon Economic Area in the North-East, including a training centre which will be the first to specialise in the manufacture and maintenance of ultra-low carbon vehicles.

Ministers are in talks with companies such as the AA about how the centre can help update skills to keep up with the growing use of ultra-low carbon vehicles.

A research and development centre will also be established, serving as a home for research from five local universities.