NISSAN'S North-East workers were celebrating last night after winning the contract to build their fifth model - a decision that promises to create 200 jobs and safeguard thousands more.

The Wearside plant beat off competition from Europe for the compact five-door people carrier.

About 1,000 staff will work on the model, which will go on sale in 2006. Work is due to start in 12 months' time.

Business leaders expressed their delight at the decision, which Sunderland City Council leader Bob Symonds called a red-letter day for the city.

The manufacturer ended months of speculation with the announcement by Nissan vice-president Patrick Pelata at the Paris Motor Show yesterday.

The model will be a production version of the Tone, a concept car unveiled at the Paris event.

Nissan Manufacturing UK managing director Colin Dodge, who flew to France ahead of the announcement, said: "We've been working very hard to increase our overall competitiveness for some time, and it's very satisfying to see our efforts being rewarded."

Nissan said 200 jobs would be created, though it stressed this figure could change depending on market conditions as 2006 got closer.

The company has invested £125m in the project, with £24m going towards preparation at the plant. It is expecting to build 100,000 cars a year. Workers were told of the contract win late on Wednesday night.

Gary Coates, manufacturing staff member, said: "This is great news for the factory.

"And if all goes well, we should get the replacement for the Almera when it comes. Our jobs are now safe until at least 2011."

Trevor Lincoln, production supervisor, said: "We have proved yet again how productive we are both in terms of quality and cost - achieving all our targets. We have proved it to the whole of Europe."

Production of the Almera will wind down at the end of the year to make way for the new model. The Tone is a European show car version of the Note, an MPV hatchback due to go into production in Japan in January.

Thousands more jobs with local suppliers are likely to be assured by the announcement.