AN innovative industry could create up to 200 jobs in the North-East by next year.

Covelink Marine, in Staindrop, County Durham, which has designed an amphibious tourist bus, has secured a contract to build the vehicles for use in Scotland.

The company's managing director, David Royle, has spent the past 15 years preparing his invention for commercial production. He said a business plan had been drawn up in order to find £3.2m for setting up a factory to make the vehicles in County Durham by next year.

He said the factory will employ 100 skilled workers who have been made redundant from companies such as Black and Decker, Lefarge Cement Works and Sanyo, and 100 contract workers.

The business is involved in a funding programme supported by regional development agency One NorthEast and other commercial parties.

However, despite good Government support, Mr Royle is still seeking funding from commercial or funding bodies to undertake the project.

The potential market for the vehicles is estimated at £200m per year, but the company is aiming at seven per cent of this, which would result in an annual turnover of £14m.

Mr Royle said: "We will be taking over an existing factory and it will definitely be in County Durham.

"There are plenty of buildings and, of course, a great availability of skilled workers because of all the recent redundancies in the area.

"We are excited about the potential of benefiting from the skills which are available in the North-East. "

He has already taken on 15 workers from Sanyo, Lefarge and GlaxoSmithKline.

The Japanese are interested in buying 150 of the buses and Covelink is working with the British Embassy in Tokyo to secure the business.

The company also has an agent in New South Wales, Australia, to win contracts there.

Mr Royle, who also runs a vintage car restoration business, said his Roylecraft water bus, which can seat up to 32 people and travel at up to 70mph on land and 35mph on water, has been undergoing tests on the River Tees, at Stockton.

Other vehicles range from 22ft to 38ft and have the potential to be used for flood rescue, Customs and Excise, and ambulances.