A £20m grant to help Nissan develop electric cars on Wearside is not in danger.
There had been fears that the funding, originally put in place under Labour, would be cut as part of a review of financial support packages.
However, Prime Minister David Cameron confirmed during Question Time that it would go ahead.
Production of the electric car, the Leaf, is expected to safeguard hundreds of jobs at the Sunderland plant.
Mr Cameron made the announcement in response to a question by the Labour MP for Houghton and Sunderland South, Bridget Phillipson.
Nissan said in a statement: "We very much appreciate this decision from the UK Government.'
The move was also welcomed by the unions.
Kevin Rowan, northern TUC regional secretary, said: "This will bring an enormous and much-needed boost to the North East's economy, workers, and beyond.
"This kind of investment is a really important feature in the future economic growth of the region."