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Nissan is to receive a £20 million grant towards building electric cars at its car plant in Sunderland. David Cameron has confirmed the new Government will honour the grant set aside by Lord Mandelson earlier this year as part of a deal that will see Nissan's all-electric Leaf manufactured in Britain.

There had been fears the funding would be cut as part of the coalition's review into public spending. However, Cameron said in the Commons yesterday: "That money will be going ahead, that investment will be going in".

The Government has already committed to refund 25 per cent of the purchase price of any electric car, up to a maximum of £5,000. This means the Nissan Leaf will cost £23,350 when it goes on sale early next year.

The Nissan Leaf will be built in Japan at first, before production moves to Sunderland in 2013. The Leaf is expected to safeguard hundreds of jobs at the Sunderland plant.

Nissan claims the Leaf is the world's first mass-market electric car and that the price is comparable to a diesel or hybrid car of the same size. And with air-conditioning, satellite navigation, a parking camera and a quick charge socket as standard, it's certainly well equipped. A comparable Toyota Prius, for example, is priced at £22,610.

The Leaf's batteries can be charged to 80 per cent of their capacity within 30 minutes, while a full charge will give a range of around 100 miles. Top speed is more than 90mph.

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