THE Prime Minister may have launched Britain's newest Nissan yesterday - but a shadow still hangs over the award-winning North-East plant.

On the day Tony Blair started production of the new Micra, Nissan's president, Carlos Ghosn, repeated his warnings that delayed entry into the euro could jeopardise future production.

The Sunderland plant almost lost the Micra contract - worth 160,000 new cars a year - to cheaper factories in Europe because the strength of the pound makes manufacturing more expensive in the UK.

Launching the new production line yesterday Mr Blair said: "I am delighted and privileged to be here to launch the new Micra, a car which we have supported as a Government. I hope this plant will go from strength to strength."

Whether it does will be down to Mr Ghosn, the charismatic Brazilian who heads the huge Nissan empire and is a frequent critic of Britain for not joining the single currency.

"Sunderland is a deserving home for the most important Nissan product launched in Europe in the past ten years," he said.

He said the decision to build the new Micra in the North-East followed two years at the negotiating table and was aided by a £40m Government grant.

"Two years ago the relationship between the euro and the pound was not as favourable as it is today," said Mr Ghosn.

"But we don't want these variations. We don't want to be profitable because we were lucky and we don't want to be unprofitable because we were unlucky.

"We don't want the benefits, or the risk, of the exchange rate. So this can only be a temporary measure, it can't go on long term.

"You cannot produce in a currency that isn't representative of most of Europe.

"This problem is still on the table. Each time we have to put important plans in place at Sunderland we will come back to this issue."

Mr Ghosn said they had invested £2bn in the Sunderland car plant, which was the biggest in the UK and the most efficient in Europe.

Micra production secured 1,400 jobs at the factory, which employs 4,000 people.

But Nissan is likely to be at loggerheads with Britain again next year over production of the new Almera.

"If we decide to do it, the UK would be the natural place," said Mr Ghosn.

"But we would have to go to another round of negotiations if the UK is not in the euro." Comment - Page 8