The future of Vauxhall's Luton factory has been safeguarded by the announcement that the next-generation Vivaro van will be built there from 2013.

There were fears the plant would have to close if Vauxhall decided to build the van elsewhere.

The Luton factory is the last volume producer of vans in the UK, with capacity for around 62,000 Vivaros per year.

1500 jobs have been saved at the factory and it is estimated a further 4,500 jobs at suppliers key to the production of the Vivaro will have also been secured by the decision.

The general secretary of the Unite union, Len McLuskey, said: "This is fantastic news. It secures the future of Vauxhall in Luton and puts to rest any uncertainty over jobs.

"Without a new model Luton would have closed - instead the plant has work until at least 2020 and 1,500 jobs have been secured."

The Vivaro is currently built as part of an arrangement with French manufacturer Renault, which has been in place since 1996 but was due to end in 2013.

The renewal of the partnership for the next generation of van will be seen as crucial for the UK automotive industry.

Vauxhall has said that the Luton factory will continue to play an 'important role' in its manufacturing network and has indicated that £130m will be spent on upgrading the assembly line.