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Toyota's planned £100m investment into its Burnaston plant has been hailed as "light at the end of the tunnel" for Derbyshire. The car giant is set to create up to 1,500 new jobs to plump up its hatchback production at the site. John Forkin, managing director of Marketing Derby, said the boost was part of "one of the greatest" inward investments to come to the UK.

Toyota's Burnaston factory will be the sole European manufacturing centre for new generation C-segment hatchbacks, in a move designed to increase local production of the vehicles sold in Europe.

Through the first phase of recruitment, which will begin next year, 500 jobs roles will be filled.

Prime Minister David Cameron described the news as "a massive vote of confidence for UK manufacturing".

Tony Walker, Toyota Manufacturing UK's (TMUK) managing director, said: "The decision to bring all production of new generation C-segment hatchbacks to Britain reflects on the excellent work done by our members in delivering the highest standards in productivity and quality. Going beyond our own operations, there will also be benefits for our local communities and regions, safeguarding thousands of jobs in the UK supply chain."

Walker added that the expansion would strengthen Britain's status as an exporter as about 85 per cent of TMUK engine and vehicle production is shipped to Europe and other world markets.

The news was welcomed by Derbyshire business leaders in the wake of several major blows to the local economy. Earlier this year, Derby trainmaker Bombardier announced it would axe thousands of jobs after it failed to win the government's lucrative Thameslink manufacturing contract, and credit card company Egg revealed it would shed 600 jobs in the city.

Forkin said: "We are proud to have such a fantastic company in the area and Toyota showcases excellent in everything it does. The company has now invested £2.1bn since it came to the UK in 1989 and it must count as the one of the greatest inward investments ever to come into the UK."

George Cowcher, chief executive of the Derbyshire and Nottinghamshire Chamber of Commerce, said the move was "extremely encouraging" and praised Toyota for making the commitment to keep motor manufacturing alive in the UK.

He added: "After everything that Derby has been through this year, it's great to see that things are finally starting to turn around for the city and that we are starting to see a bit of light at the end of the tunnel."