Ford's engineering is based at three sites in the UK

The car manufacturer will invest in petrol and diesel engines plus newer technology such as bio fuels from plants and hybrid electric vehicles.

A Ford Focus capable of 70 miles per gallon and reduced carbon dioxide emissions is planned.

Ford says it may increase the number of engineers it employs in the UK from the current figure of 9,500.

'Suite of technologies'

Lewis Booth, executive vice-president of Ford Europe, told BBC Radio 4's Today programme the research would involve a wide range of car engines.

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"We're talking about a suite of technologies which will include hybrid cars, but it will include continued improvements in diesel engines, I think some substantial and significant improvements in petrol engines, weight reduction techniques, and some micro-hybrids as well," he said.

The investment will involve Ford's other brands including Jaguar, Land Rover and Volvo.

BBC News correspondent Sumant Bhatia says the investment can be seen as a vote of confidence in the UK's technical ability at a time when manufacturers are finding it tough to make cost-effective products in the country.

Ford employs 35,000 people in the UK, including engineering operations in Coventry, Dunton in Essex and Gaydon in Warwickshire.