Nissan's decision on whether to build the new Micra at its Sunderland plant remains in the balance following this week's meeting between its president Carlos Ghosn and Prime Minister Tony Blair.

Mr Ghosn pressed the PM on the need for a stable currency and discussed the possibilities of an aid package, believed to be worth £50m, during the 45-minute meeting at No10. A Nissan spokesman said: “Mr Ghosn put the point to the Prime Minister that the Micra would be built where it would be most profitable.”

The decision to keep Micra production in the UK “depends on delivering the 30% reduction in costs at Sunderland and maintaining a stable currency”, he added. Nissan has also announced plans for a “significant reduction” in its UK parts spend, currently accounting for 70% of its European spend, due to the strength of the pound. Meanwhile Peugeot has averted the threat of an all-out strike by workers at its Coventry plant after meeting unions this week.

The carmaker, which lost an estimated £12m during two strikes last month, agreed to suspend planned changes to working hours while it holds further talks with unions.