NOT even a £40m Government aid package may be enough to persuade Nissan bosses that the next Micra should be built in the North-East.

As revealed in The Northern Echo yesterday, the European Commission is expected to approve a crucial £40m aid package for the Sunderland plant in mid-January.

Unions hope the package will convince Nissan to build the next generation Micra in Britain, safeguarding thousands of jobs and giving a big boost to the UK motor industry.

However, industry pundits cautioned last night that even if the package gets the go-ahead, the Micra is by no means a done deal for Sunderland.

Professor Garyl Rhys, of Cardiff University, said: "It makes sense for the new Micra to be built there. But much will depend on the strength of the pound. Nissan and its European partner, Renault, may feel the cost of building cars in Britain outweighs the benefit of a £40m aid package."

Nissan will have to invest more than £300m to bring the next generation Micra to Sunderland. The car will share much in common with the forthcoming Renault Clio. If Sunderland wins the contract, it may be asked to make the French car, too.

Nissan signed a £3.3bn alliance with Renault two years ago. Since then, the company has been slashing costs in a bid to turn around losses.

Carlos Ghosn, who became Nissan president in March, has already shown there are no sacred cows. Within months of arriving he ordered the closure of factories in Japan - something that would have been unthinkable under the old regime.

Mr Ghosn will not think twice about switching production from Britain to Europe if he thinks the Micra can be made cheaper overseas.

Workers at Sunderland have already implemented new working arrangements, allowing the company to add a third shift to production in preparation for landing the Micra.

Andrew Horne, corporate affairs manager for Nissan UK, said: "We are not expecting a decision on where the new Micra will be produced before January 16."