THE North-East's famous steelmaking heritage could play a pivotal role in revolutionary £8m work on next generation products.

Tata Steel, which employs about 1,500 North-East workers, is increasing its research and development division, which could see a new centre open in the region.

The move, backed by Government Regional Growth Fund cash, aims to develop more fuel-efficient steel for cars and aircraft, as well as providing materials for rail networks, power stations and skyscrapers.

The announcement comes as a double boost for Teesside steelmaking after SSI UK yesterday revealed five million tonnes of steel slabs have been made since the historic re-lighting of its Redcar blast furnace nearly two years ago.

Tata bosses say initial research work will be carried out in Rotherham, South Yorkshire, but have not ruled out bringing the project to the North-East, where the firm already supplies steel to Sunderland-based Nissan for its Qashqai and all-electric Leaf models.

It is also in discussions with business partners to turn its Teesside research centre, in Grangetown, near Middlesbrough, into a not-for-profit shared facility to attract more work to the region.

Debashish Bhattacharjee, Tata Steel's research and development group director, said: “We are strengthening our research division and want to meet the future demands of our customers who are asking for lighter, stronger and more versatile steels.

“Car makers are constantly looking to produce lighter and more fuel-efficient vehicles, and cutting-edge innovation plays a crucial role in helping us create world-leading products and services.

“We are also widening the scope of our Teesside facility to maximise its value and build collaborative programmes with a wide range of partners.”

Tata is the UK's largest steel producer and the world's 12th largest, with its Teesside beam mill, in Redcar, rolling and finishing construction steel sections, and its Hartlepool pipe mill supplying steel for energy projects.

Roy Rickhuss, chairman of the National Trade Union Steel Co-ordinating Committee, said he was pleased Tata was bolstering its UK-based operations.

He added: “This is welcome news and we want to work with the company to create a sustainable future for the UK steel industry.

“A world-class research and development centre is essential to achieving that goal.

“However, our primary interest at this stage is for the Tata employees who will be affected by this announcement and arrangements are already in place to meet with the company to discuss implications for employees.”

Bosses at SSI UK said its production milestone was reached late on Saturday night, revealing it hit another milestone earlier this month when the 50th shipment of steel bound for its Thai parent company left Teesport.

Cornelius Louwrens, SSI UK business director and chief operating officer said: “These are important milestones for the plant and highlight the commitment and determination of our employees and associated contract personnel to making this a successful business built on Teesside’s proud heritage.

“I also pay tribute to the stakeholders who continue to demonstrate their support as we strive to establish the Teesside plant as a successful and sustainable business in the global market.”