A WORLD-BEATING electric vehicle is to be manufactured in the North-East, it was announced yesterday.

Smiths Electric Vehicles (SEV), based on the Team Valley in Gateshead, is to produce a model with a top speed of 35mph and a range of more than 60 miles. The best the present market can offer is a top speed of 25mph and a range of less than 40 miles.

Roy Stanley, chief executive of SEV's parent company, the Tanfield Group, said: "This will place us at the forefront of the British market.

"Most people are still working on what is essentially milk float technology, so this will be a dramatic improvement on what is available. It is a good, road-going commercial vehicle that is cost-effective to run and hits all the right environmental buttons."

The first vehicle will be on the road this May. It is aimed at the burgeoning market for electric vehicles in areas such as airports, waste collection and mail delivery.

Mr Stanley believes the parcel delivery industry is a key area, as electric vehicles do not pay inner city congestion charges and offer the kind of speeds acceptable for cross-town traffic.

"We know there is a big market out there for this type of vehicle," he said.

It will be the first made using improved power train and battery technology produced by the Toronto-based Azure Dynamics Corporation, after the two companies signed a partnership deal.

Azure, a University of British Columbia spin-off company, will provide the electric power systems and technical support.

SEV will integrate the drive systems and components into a range of new vehicles.

Smiths is already working to incorporate an even better system from Azure on its next generation of vehicles. The second model, due to be launched next January, will have a top speed of more than 50mph and a range of more than 100 miles.

Mr Stanley said Smiths aims to be manufacturing 2,500 vehicles a year within two years - a target that will require substantial investment in assembly facilities and more workers.

"With more cities considering congestion charges, more focus on environmental factors and concern over growing fuel prices, there is growing interest in electric vehicles for a wide range of closed urban and industrial applications," he said.

"Our partnership with Azure will enable us to respond to the considerable market opportunities that exist, by improving both the performance and the broader perception of electric commercial vehicles."

He is moving the firm from Gateshead to the Tanfield Industrial Estate, near Stanley, County Durham, to increase its manufacturing capacity.

Tanfield bought SEV for £3.2m last October. Since then, orders for its electric vehicles have already doubled to £4m.