UK government ministers have welcomed Jaguar Land Rover's (JLR) decision to plough GBP355m (US$559m) into a new engine plant in the British West Midlands that will create 750 new jobs.

"Jaguar Land Rover's decision to build its new engine plant in Wolverhampton is fantastic news," said deputy Prime Minister Nick Clegg. "It means over 700 new jobs for local people, an investment of over GBP300m in the West Midlands and recognition of the expertise in the British workforce and manufacturing sector.

"Growing our economy has to be the number one priority for Britain, and the government is not sitting on its hands. With initiatives like the Regional Growth Fund, putting up to GBP10m into this new plant and Enterprise Zones boosting growth across the country, we're making the UK a better place to invest and do business."

For his part Manufacturing Advisory Service West Midlands chief executive Simon Griffiths said: "Using our knowledge of the supply chain we would expect up to 150 local companies could be involved and this ranges from experts in gears and engine controls to specialists in castings, valve systems and fluid transmission."

"However, there is no room for complacency and it is our role as the region's leading manufacturing support body to reiterate this message time and time again. Our advisers will be out on the ground talking to potential suppliers to JLR's new engine plant and ensuring they are in a position to take advantage of new opportunities as they arise.

"This may be in the form of introducing new processes, securing quality accreditations, improving delivery performance, even looking at innovations in design. Whatever the requirement, we will be there to listen and positively support."

The UK's Business Secretary Vince Cable also hailed the investment in the West Midlands in the face of "tough international competition" and the strong signal it sent to potential inward investors in the UK automotive sector.

Jaguar Land Rover was not immediately available for comment.