TRADE and Industry Secretary Stephen Byers has admitted that companies such as Nissan could "face difficulty" because of the strong pound and uncertainty over Britain joining the euro.

He was speaking after Nissan's warning that future investment at its massive North-East factory could be threatened by uncertainty over the UK's place in the single currency.

The carmaker's global president Carlos Ghosn stated his fears last week and is due to meet with key Government figures soon.

He has long campaigned for Britain to join the euro, as has John Cushnaghan, the boss of the debt-laden Japanese firm's Wearside plant.

Speaking on the BBC's On The Record programme yesterday, Mr Byers, MP for North Tyneside, said the difficulties were faced by companies exporting into the euro zone.

"As more than half of our exports go into that euro zone, clearly it has a direct impact," he said.

Britain joining the single currency had "clear benefits" including transparency of costs, improvements in trade and currency stability, he said.

Mr Byers has already acknowledged the significance of Mr Ghosn's warning, as Nissan approaches the end-of-year decision on whether to produce the new range of Micra - its most popular car - at Sunderland.

The move would prove lucrative for the region and safeguard the plant's 5,000 jobs, as well as at least 20,000 directly affected across the region.

Mr Byers' admissions came amid reports that Government ministers were preparing a £100m aid package to ensure further investment at the plant - Europe's most efficient - and claims that Prime Minister Tony Blair had been warned some time ago about the impending crisis in the British car industry.

The Government was unable to confirm or deny either of these reports last night.

London Mayor Ken Livingstone warned yesterday that Britain would lose out on investment unless it joined the euro, saying: "We have got to play on a world stage."

His view was backed by John Monks, general secretary of the TUC.

Mr Monks said there were "quite a lot of Nissans. Toyota have been saying the same sort of thing and we know it was a factor behind the BMW decision in relation to Longbridge.

"Manufacturing employment has gone down by 25,000 people in just over the last two years."