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The motor industry delivered its second piece of good news of the week on Tthursday when BMW announced plans to build its next generation of the Mini in this country, safeguarding thousands of jobs.

The German car giant said it will invest another ?500 million, including new production facilities and equipment at the Mini assembly base in Oxford, the pressings plant in Swindon and its engine plant at Hams Hall near Birmingham.

The news followed an announcement on Wednesday by Nissan that it was investing ?192 million to build the next version of its Qashqai model in Britain, also protecting thousands of jobs.

Business leaders, unions and the Government welcomed the development, which the Prime Minister said was a "tremendous vote of confidence" in BMW's workforce.

"The Mini plant in Oxford has been one of our great manufacturing success stories, they should be hugely proud of their achievements. They have shown once again that the UK is a major player in the global automotive industry," said Mr Cameron.

The new Mini coupe will be launched in 2011 and the Mini Roadster in 2012, both produced in Oxford, where more than two million Minis have been built since 2001 - three-quarters of them for export.

The company said it had invested ?1.5 billion in the UK since 2000.

BMW group chairman Norbert Reithofer said: "We have started preparing our UK plants for production of the next generation Mini and this investment underlines that the UK will remain the heart of Mini production."

Jurgen Hedrich, head of the Oxford plant, said: "Oxford has been the heart of Mini for the last 10 years and we are proud of what has been achieved here.

"Naturally we are delighted to confirm that the next generation Mini will be built here too and look forward to the continued worldwide success of these great cars."

Business Secretary Vince Cable added: "Today's announcement by BMW is a real tribute to the success of British automotive manufacturing.

"The firm's workforce in Oxford is now set to repeat the international success of the current Mini in producing the next generation model over the coming years.

"The competitiveness of automotive manufacturing in this country is shown by the commitment of the biggest global firms to make serious investments in long-term production here and as a Government we are determined to make sure this success story remains a big part of the future economic growth we must secure."

Unite said the investment will save 700 jobs at the Hams Hall plant, which it said had faced an uncertain future.

The engine currently produced at the plant is scheduled to cease production in 2014 but the new funds will bring a new model for manufacture.

Unite official Simon Powell said: "Manufacturing is an industry that has had much uncertainty to cope with in recent years but this workforce has worked with BMW every step of the way to build for the future.

"Their sheer hard graft and determination will safeguard decent, skilled jobs and ensure that the best of British, the Mini, continues to be produced in this country."

John Cridland, director general of the CBI, said: "This substantial investment by BMW is a massive vote of confidence in UK innovation and skills in the highly competitive automotive sector."