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Nissan is to build an all-new European-designed compact car at its Sunderland plant in the UK when the work on the current Micra model ends there in 2010.

The announcement was made by president and CEO Carlos Ghosn at Nissan's design centre in London, where UK prime minister Gordon Brown was visiting today. The announcement repositions the UK plant as a manufacturing site for higher value products, with the Qashqai already made there.

At the same time Nissan announced that the new Micra replacement will be one of three vehicles to be based on a new A-class platform.

These new vehicles will go to five plants sited in what Nissan calls "Leading Competitive Countries". So far, only one of these sites has been named: the Chennai plant in India that Nissan is building with its partner Renault.

Ghosn said: "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."

Nissan is thought to have received more than £6 million (€8 million) in UK regional development grants for the new model. Brown said: "Today's announcement that a brand new car is to be designed and built in the UK is another important boost to our manufacturing industry."