It has been reported that Nissan is bidding to cut costs by moving to 24-hr assembly. Such a move, reported in yesterday's Financial Times would, if implemented, raise capacity at the north east plant to 500,000 cars a year. It would become the largest UK car producer.

Already the most productive factory in Europe, Sunderland's bid to be selected as the production base for the new Micra has had profitability hit by the weakness of the euro. The FT said that senior factory managers believe changes to a 3-shift, 24-hr production pattern are vital if Sunderland is to be chosen as the factory to build the new car, especially in view of the current exchange rates.

An application has also been made to the European Commission for an estimated £50m in regional selective assistance.

The FT reported a Nissan official as saying: " "The objective is to have the ability to reach 500,000 cars a year. The central issue is how to reduce costs while seeking more production in a more flexible way."

This year, Sunderland will produce around 334,000 cars, largely on two-shift working. It has already announced plans to introduce three-shift production at its Barcelona works in Spain to meet demand for its new Tino model.

The possible change in shift patterns at Sunderland forms part of a package of changes, including continental European-style "banked hours" rather than regular paid overtime. That scheme, already adopted by other carmakers, would enable Nissan to increase output at peak periods and allow workers to take time off as demand slowed. Nissan is hoping to reach an agreed plan with staff within the next few weeks.