James Ramsbotham, chief executive of the North East Chamber of Commerce, said: “This is absolutely phenomenal news for the region. This important announcement brings train building back to the home of the railways which is testament to the skills that we still have in this sector and the high-quality workforce that will be assembled to deliver this work.”

Kevin Rowan, regional secretary of the Northern TUC, said: “This is bringing train manufacturing home, where it all began. What we all need to do now is to make sure that all of the right support in developing skills of future workers and the infrastructure around Newton Aycliffe up to the levels they need to be to enable Hitachi to hit the ground running and build on a tremendous opportunity for the North- East.”

Stewart Watkins, managing director of County Durham Development Company, the strategic investment arm of Durham County Council, said: “This is undoubtedly one of the best pieces of news for the County Durham economy for some time. In many ways, this is the perfect project for Newton Aycliffe and the wider County Durham.”

Darlington MP Jenny Chapman tweeted from the Commons chamber: “Philip Hammond – I could kiss you!!”.

Helen Goodman, Bishop Auckland MP, said: “We have a proud rail and manufacturing heritage across the North-East and this promises us a strong future as well.”

James Wharton, Conservative MP for Stockton South, hinted at the political importance of the announcement for the Government. He said: “This is a huge step towards rebalancing the North-East economy, coming hot on the heels of the recent announcement that Corus has been saved.”

Maria Eagle, Labour’s Shadow Transport Minister, said: “(This) is a real triumph for a determined and energetic local campaign to secure this investment and the jobs it will create.”

Business Secretary Vince Cable said: “Following the announcement last week of the sale of the Redcar steelmaking plant to SSI from Thailand, this shows that the North-East and the UK is attractive to inward investors.”

Fiona Hall, MEP for the North-East, said: “Manufacturing is vital to the North-East. It’s one of the things we do best and we should be proud of that. Following on from the Corus sale last Thursday, this announcement caps a very good week for the region.”

Councillor Charles Johnson, chairman of South Durham Conservatives, who met Transport Secretary Philip Hammond and David Cameron to press the North-East’s case, said: “We are delighted at the announcement and what it will bring to our sub-region.”

Councillor Richard Bell, Conservative group leader at Durham County Council, said: “It shows what can be done when politicians of all stripes unite in pursuit of such a worthwhile goal.”