Japanese car giant Nissan has announced plans to create hundreds of new jobs in a £200 million investment to build batteries for electric cars.

Gordon Brown and Lord Mandelson visited the firm's plant in Sunderland, to hear the news, which gives a big boost to the UK's recession-battered motor industry.

The battery investment makes the north east plant a contender for manufacture of the group's new "greener" electric vehicles.

The Prime Minister said: "Nissan's investment in a new battery plant and its hope to start producing electric vehicles here 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.

"This investment is also hugely significant as we embark on Building Britain's Future, our plan for recovery and beyond powered by low carbon, high technology industries, products and services.

"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."

The Government said it was working with Nissan on supporting the investment by offering grants and loan guarantees, including support through its Automotive Assistance Programme.

Lord Mandelson said: "The North East has distinguished itself as the first specialised region for ultra-low carbon vehicles.

"This is good news not just for the North East, but for the whole of the UK, helping to attract foreign investment and securing UK's place as a global leader in hi-tech manufacturing and automotive industries."