MOTORISTS will be offered grants of up to £5,000 to buy an electric car, under “green”

moves to jump start the struggling industry to be unveiled today.

And cities will be urged to pioneer the mass introduction of the vehicles, by setting up a network of roadside power points where their batteries can be recharged.

Councils will be invited to bid to be among up to five “green cities”, where trials will begin next year following talks with power companies.

Newcastle and Gateshead will be strong contenders to kick-start the initiative, after getting the nod last year to introduce convenient charging points for electric vans.

Meanwhile, the grants to make electric cars cheaper to buy – they are often seen as overpriced – will give a big boost to the Nissan plant at Sunderland, which announced 1,200 redundancies last year.

Last week, the European Union handed Nissan a £380m loan, about half of which could be used to build electric cars at Sunderland, securing up to 4,500 jobs across the North-East. The company and the regional development agency, One North East, have signed a “memorandum of understanding” aimed at making the region a world leader in developing the car of the future.

However, on the eve of announcing today’s £250m package of measures, Lord Mandelson was given a stark warning that time was running out to rescue the vehicle component industry.

An all-party group of MPs, including Fraser Kemp, the Houghton and Washington East MP, warned of the “bleak future” confronting 100,000 employees.

The group’s four-point programme calls for Government wage subsidies to keep workers in jobs, cheap loans for carbuyers, a scrappage scheme for old vehicles and cheaper credit for supply chain companies.

The report said: “The UK’s vehicle component industry is fundamentally sound, yet the economic downturn has placed unprecedented pressure on the sector.

“Immediate action that saves jobs, gives better access to credit and supports consumers to buy more environmentally- friendly cars will ensure this high-tech industry is able to survive the downturn.”

Wage subsidies have already been introduced in Wales for car and steel workers facing the dole, but have been dismissed as unworkable by the Westminster government.

A scrappage scheme – offering a £2,000 subsidy for exchanging an old car for a fuelefficient model – could be included in next week’s Budget, but a final decision has not been taken.

Ministers fear the scheme would subsidise overseas carmakers, since most new vehicles in Britain are imported.

However, they believe this country could become a large producer of electric cars.

Ahead of today’s announcement, a Government source said: “To get electric cars on the road, we need to make them affordable and give people confidence they will have somewhere to plug them in.”

On “green cities”, the source added: “Councils will need to show they can sustain a large number of electric cars by having the right infrastructure, which means enough charging points.”

Darren Kell, chief executive of Washington-based electric vehicle company The Tanfield Group, was keen for the Government to introduce tax incentives for businesses to adopt electric vehicles.

He said: “Businesses tend to be the best adopters of this sort of technology so if you can get them on board it will encourage the wider adoption.

We would also like to see greater public sector usage.”

Mr Kell believed the public sector was important because electric vehicles were appropriate for a lot of the work and functions it carried out.