The company says a third shift will be introduced at the plant to move to 24 hour production for the first time.

Recruitment for the new positions will start in the summer and by the time the new shifts start next year the plant will employ close to 5,000 workers.

Trade and Industry Secretary Patricia Hewitt said she was "delighted" by Toyota's decision.

Expansion

Burnaston is Toyota's main manufacturing plant in the UK where it makes the Avensis and Corolla models.

This investment demonstrates that the UK automotive industry is in a good position to succeed in a competitive global environment Patricia Hewitt, Trade and Industry Secretary

The Avensis - which started production earlier this year - is set to become the first European-built Toyota to be exported to Japan later this year.

The new positions are being created because Toyota wants to increase production from 220,000 to 270,000 cars a year.

In the first three months of this year the company sold a record 212,000 cars in Europe and now has close to 5% of the overall market.

Bucking the trend

"I am delighted that Toyota have chosen to break new ground in the UK through the introduction of a third shift at their Derbyshire plant," Patricia Hewitt said.

"This investment demonstrates that the UK automotive industry is in a good position to succeed in a competitive global environment."

Unions also welcomed the news.

"This is great news for the Toyota workforce and for the wider Derby community," said Derek Simpson, the joint general secretary of Amicus.