Media playback is unsupported on your device Media caption Derry is announced as the UK's inaugural City of Culture

Londonderry has been chosen as the UK's inaugural City of Culture.

The announcement was broadcast live from Liverpool on the BBC's The One Show on Thursday night.

Derry, which was short-listed alongside Birmingham, Sheffield and Norwich, will take the mantle in 2013.

Hundreds gathered in the Guildhall to hear the result relayed on big screens. A number of nationally significant events such as the Brit Awards and the Turner Prize could be hosted in Derry.

The idea for a UK City of Culture came from the success of Liverpool during its year as European Capital of Culture in 2008.

The honour does not come with any direct government funding but the bid organisers are hoping to use it is a focus for fundraising and regeneration.

Plans are already in place to hold a pageant on the River Foyle celebrating the return St Columba, to Ireland, a contemporary music festival and a visual arts festival.

Other elements of the winning bid included giving children across the city access to music training and a new commission from the Field Day theatre company.

The judging panel was led by television producer Phil Redmond, he was joined by culture minister Ed Vaizey for the announcement. Both men are due to travel to Derry on Friday.

Northern Ireland's Deputy First Minister Martin McGuinness travelled to Liverpool for the announcement and said he was "over the moon".

"We've won on our merits. This in an evening when hope and history rhymes in Derry," he said.

"This is a precious gift for the peacemakers.

"Now that the green light has been shown, the real work begins. The benefits will last for five to 10 years, the buildup is an important as what happens in 2013."

Image caption The moment the result was announced in Liverpool

The actor James Nesbitt, who was on of the bid's celebrity backers, said the win confirmed Derry as "a cultural powerhouse."

"Whether it is writers like Seamus Heaney and Seamus Deane, songwriters and performers like Phil Coulter or the Undertones, artists like Willie Doherty, filmmakers like Margo Harkin and Tom Collins or actors like Amanda Burton, Roma Downey and Bronagh Gallagher, the city has asserted a huge influence on the arts internationally."

The city's mayor, Colum Eastwood of the SDLP, said the award would bring lasting benefits for Derry.

"This will bring the jobs, the investment, the regeneration that we need."

Phil Redmond said the title was a "badge to bring people together".

"When people read Derry's bid, it's about acknowledging the past, not shying away from it," he said.

"If that is not the role of culture, I don't know what is."

Potential

Marie Louise Muir, who was broadcasting live from the Guildhall for BBC Radio Ulster and BBC Foyle, said the crowd listening to the result had "gone bananas and were absolutely thrilled".

Gregory Campbell, DUP MP for East Londonderry, told her that he felt "very proud" of the city's success.

"It has great potential, let's realise that potential," he said.

"It could be the case if we are not careful that this could just be a three-year long party."

Mr Campbell also cautioned that everyone need to be involved in the events in what is a majority nationalist city.

"We need to try to ensure that the divisions of the past, are the divisions of the past and that this has a unifying potential for the future," he said.

"Too often in the past this city has had a divided culture, we need to bring people together."