Nissan Motor on Tuesday said it would build an unnamed "innovative all-new compact car" at its Sunderland plant in north-east England, starting in 2010.

Reports from Japan said the new model would be a new compact SUV and that the British government had kicked in a GBP6.2m subsidy to help start-up costs.

"Building on the success of the Qashqai, the all-new product will reinforce Sunderland's role as manufacturer and exporter of high-value products," the automaker said.

Nissan president Carlos Ghosn added: "By delivering on tough commitments, our employees at Sunderland have demonstrated our plant can be a globally competitive centre for the production of high-value products. We are encouraged by the proactive support shown by the British government to decide new products for the Sunderland plant."

Nissan said the new vehicle would be an addition to its range, taking over manufacturing capacity created when production of the current Micra (March) ends in 2010.

Nissan will remain in the Micra's entry-level sector with a new, dedicated A platform that will be used for at least three models, including the next generation Micra (and various Renault models), to be built in five of what it calls 'Leading Competitive Countries (LCCs)' - in other words, 'low cost'.

Production sites for this new family of compact cars will include the new plant in Chennai, India, being constructed by the Renault-Nissan Alliance.

Nissan Sunderland produced a record 374,000 vehicles in fiscal year 2007 and the automaker claims to be the largest vehicle exporter from the UK, with around 80% of production sold outside the country.

Together with the engine assembly plant and other facilities, Sunderland currently employs 4,700.