Nissan has announced it will build its new Qashqai model, as well as the X-Trail SUV, at its UK plant in Sunderland.

In the first major decision for the car industry since the Brexit vote, the Japanese car maker said its announcement follows the government's commitment to ensure the Sunderland plant remains competitive.

However, No 10 specified that assurances did not mean compensation packages or state aid, insisting there was no sweetheart deal for the car trade.

Prime Minister Theresa May said the announcement was "fantastic news for the British economy".

She said: "This is a very important commitment of investment here in the UK. I think it shows the strength of our economy.

"We have been talking to Nissan and others about how we will ensure that we get the best possible deal for our arrangements for dealing with trading with the European Union once we've come out of the European Union, but also retaining the competitiveness of the British economy into the future".

Nissan boss Carlos Ghosn said the "support and assurances" of the British government ensured his company would continue to invest in Sunderland.

The Nissan CEO and chairman said: "Our employees there continue to make the plant a globally competitive powerhouse, producing high-quality, high-value products every day.

"The support and assurances of the UK government enabled us to decide that the next-generation Qashqai and X-Trail will be produced at Sunderland.

"I welcome British Prime Minister Theresa May’s commitment to the automotive industry in Britain and to the development of an overall industrial strategy."

A spokesperson for No 10 said Britain had not offered Nissan compensation in return for any Brexit-induced costs.

"There is no compensation package," the spokesman said.

"What we have made clear to Nissan and to others in the industry is that what we want is a competitive environment for the whole of the industry".

However, ITV News Political Correspondent Paul Brand, said that with Brexit still more than two years away, the real test will be whether Nissan builds future models at the plant.

Production of the next Qashqai model is expected to begin in 2018 and 2019, and the car maker's decision is expected to secure around 7,000 jobs.

Last month, Mr Ghosn, said he could scrap new investment at Nissan's Sunderland plant, which built almost a third of cars in Britain last year, without a guarantee of compensation for costs related to any new tariffs resulting from Brexit.

The Sunderland plant has been active since 1986 and employs almost 7,000 people, who help produce around 2,000 cars a day.