BAE Systems is investing up to £20m in the North-East to help it win work on a £16bn defence project.

BAE Systems Land Systems is transforming its Newcastle base to help it secure the key integrator role on the British Army's Future Rapid Effects System (FRES) program.

Landing work on the FRES project, which is the largest defence procurement in land since the Second World War, will be vital to the future of BAE's Scotswood Road site, which employs about 650 people.

It has been reported that if the group fails to land a FRES contract from the Ministry of Defence (MoD), then it may be forced to close its armoured- vehicle factory.

Yesterday, Kate Roberts, communications manager at BAE Systems Land Systems, said: "We are doing everything we can to put ourselves in the best position possible to win work on the FRES programme and we are doing everything we can to ensure we sustain the Newcastle facility and the people who work here."

FRES is an MoD programme to provide the British Army with medium weight, air-deployable armoured vehicles and BAE is currently preparing its bid.

Ms Roberts said: "The vehicle integrator role is a key role in the FRES programme. In addition to being responsible for the installation of equipment into the vehicle, it will lead the team who manages the vehicle through its in-service life, ensuring new technologies are integrated throughout its life to provide the most effective vehicle possible to the British Army ."

To support its bid, BAE plans to invest between £15m and £20m to improve the infrastructure, processes, technology and skills at its Newcastle plant, and introduce lean manufacturing techniques. It has also appointed Jim Imrie as managing director of transformation and performance excellence to oversee the changes.

The move is in response to comments made by Minister for Defence Procurement, Lord Drayson, within the Defence Industrial Strategy (DIS). He said: "We expect to see a significant evolution of BAE Systems Land Systems, both to deliver AFV (armoured fighting vehicles) availability and upgrades through life, and to bring advanced land systems' technologies, skills and processes into the UK.

"If successful in their evolution, BAE Systems will be well placed for the forthcoming FRES programme."

At Newcastle, BAE manufacturers the Trojan, a bespoke vehicle for obstacle-crossing, and the Titan, the faster tank bridge-layer in the world.

BAE's land systems division also employs 330 staff in Birtley, near Chester-le-Street, at the former Royal Ordnance factory site.