Japanese car giant Nissan has threatened to rule out fresh investment in its Sunderland factory unless the British government promises to reimburse firms for the hit they could take from Brexit.

Boss Carlos Ghosn said that auto manufacturers should receive compensation from the British Government if the UK’s decision to leave the European Union results in the imposition of tariffs on UK-made cars that are exported into the EU.

Nissan is expected to choose in a matter of months where it will produce the latest model of its Qashqai vehicle. Its Sunderland site is Britain’s largest car factory and would be boosted by extra investment if the company decides to make the next Qashqai there.

However, Mr Ghosn, who was speaking at the Paris motor show, suggested future UK investment by Nissan was conditional on the company securing guarantees on compensation.

“If I need to make an investment in the next few months and I can’t wait until the end of Brexit, then I have to make a deal with the UK government,” he said.

He continued: “You can have commitments of compensation in case you have something negative. “If there are tax barriers being established on cars, you have to have a commitment for carmakers who export to Europe that there is some kind of compensation.”