Japanese engineering company Hitachi has announced plans to relocate its rail operations to the UK.

The firm has decided to make Britain its base for entering the European rolling stock market and may assemble products for its French and German clients at its new facility in County Durham. The factory has already won the contract to build the next generation of inter-city trains.

Officials at the business state the move will not signal a large-scale transfer of workers from Asia to the UK and that its headquarters in Tokyo will still remain open. 

Business secretary Vince Cable commented: "This move demonstrates a huge vote of confidence in Britain, its workers and its rail industry from one of Japan's biggest businesses."

The purpose-built factory in Newton Aycliffe is expected to be completed by next year and be fully operational in 2016. It is set to manufacture a total of 270 carriages and hopes the plant will enable it win further lucrative contracts throughout the continent.