AS the ink dries on a $1bn deal securing the future of steelmaking on Teesside, the Government was last night urged to give the go-ahead for train building to return to the birthplace of the railways.

Campaigners called on the Government to follow the lead of Thai steel producer Sahaviriya Steel Industries (SSI) and show faith in the North-East by handing the Intercity Express Programme (IEP) to the Hitachi-led Agility Trains consortium.

Transport Secretary Philip Hammond is rumoured to be planning an announcement on IEP next week when Parliament resumes after a half-term break.

Hitachi has pledged to build an assembly plant at Newton Aycliffe, County Durham, if it gets the £7.5bn contract to build the country's next generation of high-speed trains.

The deal would create 800 jobs directly and many more in the supply chain.

Sedgefield MP Phil Wilson, who has led the campaign to bring Hitachi to County Durham, said: "Thailand has got faith in the North-East - it's about time the coalition Government showed the same faith and commitment."

SSI, Thailand's largest steel producer, signed an agreement with Tata Steel UK, formerly Corus, to buy the Teesside Cast Products plants at Redcar for $469m on Thursday.

The deal secures the jobs of 700 workers kept on when the plant's mothballing began a year ago, and paves the way for a similar number of jobs to be created over the next year.

Stewart Watkins, managing director of County Durham Development Company (CDDC), the strategic investment arm of Durham County Council, which has been heavily involved in the bid to attract Hitachi to the region, said SSI's purchase of TCP was a huge boost to the North-East economy, which would be complemented by a positive decision on IEP.

He said: "Were we to get both Hitachi and SSI ramping up operations in the North-East, it would have an immediate impact on the region's economy.

"Given that unemployment is higher in the North-East than any other area in the UK, the urgency surrounding a positive decision cannot be overstated."

James Ramsbotham, NECC chief executive, described the decision by SSI to buy TCP as a "tremendous fillip for communities across the Tees Valley and the wider North-East economy".

He added: "The jobs and prosperity that both SSI and Hitachi would bring are exactly the springboard we need for a real upsurge in the economic fortunes of the North-East."

Kevin Rowan, regional secretary of the Northern TUC, also welcomed the SSI deal.

He said: "It's testament to the work of unions, people like TCP multi-union chairman Geoff Waterfield and Tom Blenkinsop MP, the community and partners in keeping the embers alight.

"What's important now is we take confidence from that and press again the great case for Hitachi coming to Newton Aycliffe and give a similar boost to people in County Durham and beyond."

A key theme for union leaders who welcomed SSI's purchase of TCP was the opportunities the deal would create for Teesside's young people. It is hoped an assembly plant run by Agility Trains would bring similar benefits.

Tim Grant, principal and chief executive of Darlington College, said the project would have a "profoundly positive impact" not only on Darlington and Newton Aycliffe today, but on generations of young people across the North-East.

He added: "Darlington College has a proud history of generating skilled, talented and bright students who have earned the right to show how much they can contribute to a project of this magnitude and turn this regional ambition into results."

Civil servants have reportedly drawn up a proposal that would hand IEP to the Hitachi.

Transport Secretary Philip Hammond is now understood to be examining the plan before making a decision.

The deal would see Hitachi build a fleet of bi-mode diesel trains with the capability of running on electric or diesel.

A spokesman for the Department for Transport said a decision on IEP would be made in due course.