Nissan is to make batteries for its electric vehicles in Sunderland.

It will receive aid from the UK Government for the project.

The UK site will be the “Nissan European Mother Site for Battery production” and the centrepiece of the newly-established Low Carbon Economic Area in the Northeast.

“Nissan’s investment in a new battery plant and its hope to start producing electric vehicles in Sunderland is great news for the local economy, creating up to 350 direct jobs and creating and safeguarding hundreds more in the associated supply chain,” said prime minister Gordon Brown.

“Sunderland could now be a strong contender to produce electric vehicles for Nissan in Europe, and we will continue to work with Nissan to ensure this happens.”

As part of the newly established Low Carbon Economic Area, Government intends to establish a new training centre, specialising in low carbon automotive technologies; a technology park and an open access test track for low carbon vehicles.