Car giant Nissan is to axe 1,200 jobs in the wake of the economic slowdown which has hit the motor industry hard and led to sales slumping.

The jobs will go at the firm's plant in Sunderland, which employs around 5,000 workers and is one of the most long-established and biggest employers in the North East.

Shifts will be cut and 1,200 jobs axed, including 400 staff on temporary contracts.

The cuts follow increasing pleas from the motor industry for Government action to boost the availability of credit for consumers as well as firms.

Figures yesterday showed car sales continuing to fall, down to the lowest levels in more than a decade.

Nissan sold 66,336 new cars in the UK in 2008 - only 0.14% fewer than in 2007. This was a much better performance than the national average which saw new car sales slump 11.3% in 2008.

However, Nissan sales for December 2008 fell 26.68% compared with the same month in 2007. This compared with a national decline of 21.2%.

A year ago this month Nissan announced that it was creating 800 jobs in Sunderland in response to demand for its Qashqai model. A third production shift was added at the plant, which first started building cars in 1986. :: The job cuts were announced on the day Nissan unveiled a new 107,000 luxury sports car in Japan, showing off a souped up version of its GT-R sports car which it said was a bargain compared with European rivals.

Derek Simpson, joint general secretary of the Unite union, said: "This is devastating news for the workers and their families. Today's announcement shows just how serious Britain's economic difficulties are.

"Unite will be doing everything possible to minimise compulsory redundancies and it is absolutely crucial that these workers' skills are not lost.

"The economy will improve and when it does Nissan will need these workers' skills again.  The Government must support these workers through opportunities to re-train or to develop their skills.

"I hope the lessons of Rover have been learnt. In 2005, thousands lost their jobs, most of them were forced to abandon manufacturing and take a pay cut just to stay in work. It is imperative that we protect our skills base, otherwise Britain will come out of recession considerably weaker.

"There is no doubt that 2009 is going to be a harsh year. Gordon Brown must continue to do what it takes to stimulate the economy and get people spending again.

"These job cuts lay bare the human cost of the credit crunch. It beggars belief that the Tories would rather cut spending just when people need real help."

Unite is pressing for a £13 billion strategic support package for manufacturing from the Government, similar to support provided by the German, French and Swedish governments to their manufacturing sector.