UP to 400 jobs could be created in the region by The Tanfield Group if a newly-won UK contract to supply zero-emission vehicles is extended across Europe.

Earlier this month, Tanfield announced its Smith Electric Vehicles division had agreed a deal with parcel delivery company TNT to supply two of its Newton vehicles for trial, with a view to ordering 400 more for use in the UK.

The deal, over two years, would be worth about £24m.

Only days later, Peter Bakker, TNT's global chief executive, has ordered an immediate feasibility study to establish how many of the 7.5-tonne vehicles the company could use in Europe.

Last night, a Tanfield spokesman told The Northern Echo that the subsequent order for vehicles could lead to the creation of between 200 and 400 jobs in the North-East.

Although it is unknown how many extra vehicles TNT might order, it is thought to be several hundred.

A Tanfield spokesman, said: "Groupwide, we would be talking about the creation of between 200 and 400 jobs, the vast majority of which would be in this region.

"It is still early days when talking about how many vehicles will be ordered, and depends on the findings of the feasibility study."

A potential deal would be on top of Aim-listed Tanfield's predictions that its turnover will grow to nearly £100m by the end of next year, and its planned creation of 400 jobs within the next three years.

The results of TNT's study are expected next month, and it is believed that Newton vehicles could be on the streets of Amsterdam, Paris and Milan shortly afterwards.

The development marks the latest success for the Smith division, which agreed a deal earlier this year with Enova, in California, to supply 120kw electric systems to power its zero-emission vehicles.

Smith, the world's largest road-going commercial electric vehicle maker, is based at Tanfield's 250,000sq ft factory in Washington, Wearside.

Darren Kell, chief executive of The Tanfield Group, said: "This is a really significant development for us.

"The global chief executive of one of the biggest delivery companies in the world has taken a personal interest in our vehicle.

"Developing vehicles for Europe has always been part of the strategy for Smith and we are delighted that TNT is leading the way as our first customer."