A DEAL to build the next generation of high-speed trains in the North-East is edging closer, it is claimed.

Civil servants have reportedly drawn up a proposal that would hand the Intercity Express Programme to the Hitachi- led Agility Trains consortium.

Transport Secretary Philip Hammond will now examine the plans for the Intercity Express Programme before making a decision in the coming weeks.

The deal would see Hitachi build a fleet of bi-mode diesel trains with the capability of running on electric or diesel.

Officials are recommending that another proposal to build separate diesel and electric trains should be dropped.

A plan to fit diesel locomotives to electric trains when the overhead power cables fail on a line is also looking unlikely to be pursued.

It is thought these cutbacks are attractive to the Government because they make the proposal simpler and cheaper than the original £7.5bn deal.

Hitachi has indicated it would build an assembly plant at Newton Aycliffe, County Durham, if it won the contract.

An insider told Rail Professional magazine: “This Secretary of State has a mind of his own. So it is still possible he may not choose this option, but it seems some heavy lobbying by the Japanese ambassador has paid off.”

Campaigners say awarding the contract to Agility would help to rebalance the economy by creating 800 private sector jobs directly.

Last night, Sedgefield MP Phil Wilson, who has led the campaign to bring Hitachi to the North-East, gave the reports a cautious welcome.

He said: “I’m pleaded to hear any signs of positive news. We now need a decision from the Government. It’s been dragging on for too long now and we need to know one way or another.”

Stewart Watkins, managing director of the County Durham Development Company, said: “We have waited a long time to learn if the Government will be investing in this important project.

“The Intercity Express Programme presents a phenomenal opportunity to re-energise the south-west Durham economy and I sincerely hope Philip Hammond gives it the green light and that the decision is taken soon.”

A spokesman for the Department for Transport said a decision had yet to be taken.