Rolls-Royce says it plans to have a small modular nuclear reactor factory running before 2029 but it is unclear whether two North East sites are still in contention to host the job-creating facility.

The engineering firm has been selected as the Government's preferred bidder to partner with publicly-owned Great British Energy - Nuclear to develop small modular reactors (SMRs) subject to final approvals. In this Spending Review period, more than £2.5bn has been pledged to the wider SMR programme, which has been subject to years' of delays.

In announcing Rolls-Royce, the Government said Great British Energy - Nuclear aims to allocate a production site later this year, before projects are connected to the grid in the mid-2030s. Three years ago, Rolls-Royce said the IAMP site near Sunderland and the Teesworks site in Redcar were competing with Shotton on Deeside to host a factory that will supply components for the SMRs, which will be capable of producing enough power for up to one million homes.

At the time, Rolls-Royce had indicated it would set up three facilities with the other two sites chosen from a wider shortlist that also included Forest Park in Newton Aycliffe. That was before significant delays in the selection process with Rolls-Royce now passing through the final stage of assessment by the º£½ÇÊÓÆµ nuclear industry independent regulators.

A Rolls-Royce SMR spokesperson said: "Rolls-Royce SMR’s º£½ÇÊÓÆµ-based manufacturing facilities will produce components for our factory-built power station which will sustain several hundred high-quality, jobs with potential for thousands more in the local supply chain. Following this commitment from the Government, our target is to have our facilities established and operating before 2029."

Energy Secretary Ed Miliband said: "We are ending the no-nuclear status quo as part of our Plan for Change and are entering a golden age of nuclear with the biggest building programme in a generation.

"Great British Energy - Nuclear has run a rigorous competition and will now work with the preferred bidder Rolls-Royce SMR to build the country’s first ever small modular reactors – creating thousands of jobs and growing our regional economies while strengthening our energy security."

Simon Bowen, chairman of Great British Energy – Nuclear said: "This announcement is a defining moment for the º£½ÇÊÓÆµâ€™s energy and industrial future. By selecting a preferred bidder, we are taking a decisive step toward delivering clean, secure, and sovereign power. This is about more than energy—it’s about revitalising British industry, creating thousands of skilled jobs, and building a platform for long-term economic growth."

SMRs are touted as smaller and quicker to build than traditional nuclear plants, and the Government has an ambition to deliver one of Europe's first fleets. News of Rolls-Royce's selection came as part of a broader set of announcements about º£½ÇÊÓÆµ nuclear capacity including £14.2bn committed to building the Sizewell C power station in Suffolk.