PLANS to build a £300m deep sea terminal and create 5,500 jobs in the region could be only months away from final approval.

The campaign to build the container terminal at Teesport, in Middlesbrough - known as the Northern Gateway scheme - has cleared its biggest hurdle.

The proposals had faced objection from operator Hutchison Ports, which owns terminals in Felixstowe and Harwich.

But yesterday Teesport-owner PD Ports said Hutchison had withdrawn its objection.

PD Ports chief executive David Robinson said, after an assessment by the Department for Transport, the proposals would be given to the Government.

He said plans were likely to be approved by March but could receive the go-ahead by Christmas.

Hutchison had objected to the scheme on the grounds of impact on roads and the rail network being unable to take the extra freight. But Mr Robinson said an agreement had been reached.

"PD Ports has held a series of discussions with Hutchison about its concerns," he said.

"The Northern Gateway will act as a northern port for northern markets.

"PD Ports has decided to address Hutchison's concerns directly by contributing to the provision of upgrades to the East Coast Main Line and diversionary routes."

He said the move was a "major step forward" for PD Ports, northern shippers and retailers, and would prevent a lengthy and costly public inquiry.

"We will now work with the Department for Transport, which has already confirmed the withdrawal of the objection, to enable the Minister to make an early decision," he said. "We are confident Minister Ruth Kelly will give PD Ports the final approval."

Regional development agency One NorthEast welcomed the news.

Its chief executive, Alan Clarke, said: "PD Ports is already an important employer in the region, providing more than 500 jobs directly and 1,300 indirectly, contributing £250m gross value added to our economy.

"The deep sea container terminal could open up a number of opportunities for development and investment in the region.

"In turn, it would strengthening our bid to narrow the productivity gap between the region and the rest of the UK, and helping us to achieve our aim of being a leading location for national and international businesses."

The first phase of the project could be built in two years.

Port company Global Transport Logistics is one of the firms that would benefit from the scheme.

The firm's founder, Gary Smith, said: "Our service will certainly be enhanced and the costs of importing and exporting will be massively reduced."