Thousands of workers at the Nissan car plant heaved a sigh of relief this morning after being told that the company plans to build the new model Micra at the Sunderland site.

Arriving at work this morning, over 2,000 workers expected news from the company as to whether the new Micra would be built in the North-East or at the company’s site close to Paris.

The news came at an informal briefing prior to an official announcement expected from Downing Street later this morning. A formal press conference is expected at the Sunderland plant this afternoon. Rumours that Prime Minister Tony Blair may attend the site in the afternoon have not been confirmed.

Upto 500 extra jobs are expected to result from the decision which will also secure the future of the existing 5,000 workers at the plant and an estimated 15,000 in support, supply and ancilliary industries, for a period of upto 10 years.

The decision to build the new Micra at Sunderland will mean a further investment of £235 million, and a boost in production from 330,000 cars a year to 500,000. Production of the new model is planned to begin in December of 2002. The investment follows agreement with the government on an aid package to Nissan of some £40 million.

The fact that the Sunderland production facility is believed to be the most efficient and productive in Europe, is considered to have been an important factor in reaching the final choice.

The Prime Minister, Tony Blair, told journalists that the announcement was, “great news, great for the North, great for the country.” He went on to say that the move recognised the productivity of the workforce, which he described as a “great tribute” and confirmed that the UK was an attractive place for investment by foreign companies.

The news comes in the wake of the ending of production of cars by Ford at Dagenham, and the ending of production of the Vauxhall Vectra at Luton.

Uncertainty over Britain’s position on joining the Euro still leaves uncertainty with potential investors in the UK.