AN electric vehicles manufacturer has signed two multi-million pound deals.

Roy Stanley, chief executive of the Tanfield Group, based near Stanley, County Durham, said: "This is a big opportunity for the region.

"The North-East will be the pre-eminent centre in the world for electric commercial vehicles."

He announced that Smiths Electric Vehicles (SEV), which is owned by the Tanfield Group, had won a contract to provide commercial electric vehicles for one of the biggest names in the European automotive industry.

The Northern Echo exclusively revealed last month that the company was on the brink of agreeing the deal.

SEV will convert delivery vans and minibus-type vehicles from diesel to electric power for a multi-national client that has asked not to be named.

Initially, they will be sold through the client's extensive UK distribution network, with further European territories to be added if sales go well. Mr Stanley would not be drawn on how many jobs would be created, but one source said the group expected to double its workforce of 400 during the next five years.

Mr Stanley said: "This is a very large opportunity.

"The kind of volumes the client is talking about are very significant and, for us, is all about brand equity."

SEV won the contract after it produced an electric vehicle that incorporated a power train and battery technology by Canadian company Azure Dynamics.

It has a top speed of 35mph and a range of more than 60 miles, while the best the present market can offer is a top speed of 25mph and a range of less than 40 miles.

Tanfield bought SEV in October last year for £3.2m.

Mr Stanley moved the company from Gateshead to join other operations on the Tanfield Lea Industrial Estate.

This year, SEV has won contracts worth more than £5m for its aerial access ladder platforms, airport baggage vehicles and milk floats.

The latest deal aims to capitalise on growing Government pressure for more commercial vehicles to be zero emission in areas such as parcel delivery and refuse collection.

SEV is also working on the next generation of electric vehicles.

Tanfield announced yesterday it had invested £250,000 in a £7m joint venture with QinetiQ to develop fuel cells.

QinetiQ, which began as part of the Ministry of Defence, was established to commercialise leading military technology.

If trials are successful, that will be in production by 2008.

Mr Stanley said: "For a fairly low ticket price, we are getting access to a very big game."

QinetiQ is also looking to provide SEV with a new battery for its vehicles.

Half the weight and twice the power of those presently available, it should be in production by the end of next year.