A NORTH-EAST train builder is set to miss out on a £500m deal to build a new fleet of Tyne and Wear Metro trains due to the additional costs and risk assessments of Brexit, it has been claimed.

Last month, The Northern Echo revealed Newton Aycliffe-based Hitachi had been overlooked by Nexus, the public body which owns and manages the Tyne and Wear Metro, to design, build and maintain the new trains, with the contract being awarded to a Spanish firm.

Tees Valley Mayor Ben Houchen said it was an “appalling decision” and called on the leaders of Tyne and Wear’s five local councils and Nexus to stop the procurement process.

But in a response to his request seen by the Echo, Cllr Martin Gannon, leader of Gateshead Council, said "additional costs and risk assessments" relating to Brexit had been one of the "major issues" confronting Hitachi.

Last night, Sedgefield MP Phil Wilson said it "wasn't a surprise" and was another significant warning to the North-East following Nissan's no-deal Brexit warnings last week.

Mr Houchen is now calling for the procurement process to be paused until the Government had secured the certainty of a Brexit withdrawal agreement with the EU, removing the need for a risk assessment, which would create a more competitive competition, a better deal for taxpayers and a deal that gives Hitachi a "fair crack" at winning the contract.

He said: “The whole procurement exercise needs to be stopped. For the sake of a few weeks – or even a few months - to allow there to be a Brexit deal it should be stopped. This would allow for a more competitive competition, a better deal for taxpayers and a deal that gives Hitachi a fair crack at winning this contract.

"Then and only then should they consider bids from companies, including Hitachi, and give due weighting to the social and economic benefits of building these trains in the North East.

“If a firm from our region can make a competitive bid to build the new Metro fleet here they should be proud to support it, rather than hiding behind process and red tape, and sending elsewhere."

Mr Wilson added: "The procurement process is still ongoing so we don't know the full details, but given the warnings we have already heard from Nissan, this isn't a surprise.

"If Hitachi have included the full costs and risk assessments of Brexit in their bid, then I would say that is them being prudent."

Hitachi has been struggling for orders in recent months after it missed out on a contract to build 94 new Deep Tube trains to serve the London Underground’s Piccadilly line.