Gianluca de Ficchy, the Japanese firm’s Europe chairman, said that the decision had been taken for “business reasons” affected by rules on diesel engines and reduced sales.

The announcement that the X-Trail would be built in Japan was made in a letter to staff that followed a day of political rows between Brexit supporters and opponents over the reason for one of Wearside’s largest employers reneging on a 2016 decision to build the car there.

Brexit: Theresa May will ‘battle for Britain’ on return to Brussels

Japanese car manufacturer Nissan confirmed it was cancelling plans to build its X-Trail SUV at its plant in northeast England despite Brexit assurances from the government. Picture: Getty Images

In the letter Mr de Ficchy said: “Today’s announcement will be interpreted by a lot of people as a decision related to Brexit.

“We have taken this decision for the business reasons I’ve explained, but clearly the uncertainty around the UK’s future relationship with the EU is not helping companies like ours to plan for the future.”

Labour leader Jeremy Corbyn said: “The Conservatives’ botched negotiations and threat of a no deal Brexit is causing uncertainty and damaging Britain’s economy.”

And Sharon Hodgson, the area’s Labour MP, said: “This is a great loss of future investment in Sunderland and I am sure that people will share my huge disappointment and concern at this news.

“Tomorrow I will be seeking answers from Government ministers as a matter of urgency”.

The announcement came as two senior cabinet ministers rejected the idea of the UK remaining in a customs union as the price of getting a Brexit deal.

Labour wants the UK to remain in some sort of customs union as part of a Withdrawal Agreement.

But Home Secretary Sajid Javid said that he believed that Tory backbenchers would kill off such a plan even if it managed to attract Labour support in the Commons.

He told the BBC’s Andrew Marr Show he did not support agreeing to remain in some sort of customs union and questioned support for such a plan.

“In principle I am totally against a customs union because it would not, in my view, deliver on Brexit because we need to be able to have our own independent trade policy. That is number one,” he said.

“Practically, I don’t think it would get a majority because whilst you might gain some Labour votes ... you would also lose votes on the Conservative side.

“I don’t actually think you would get a majority so I just think it’s a complete non-starter and if Jeremy Corbyn is serious he should start having serious talks with the Prime Minister in the national interest.”

And International Trade Secretary Liam Fox, asked on Sky’s Ridge on Sunday whether he could “stomach” a customs union to achieve a deal, simply said: “No.”

Their interventions came after Theresa May had said she would be “battling for Britain” when she returns to Brussels to seek a “pragmatic” Brexit deal that can win over both the European Union and her own MPs.

Writing in the Sunday Telegraph, she suggested that Labour leader Jeremy Corbyn had agreed with her that the Irish border backstop as set out in the Withdrawal Agreement had to change.

Mr Javid also dismissed reports of planning in Downing Street for a summer general election.

He told Marr that the Tories were only planning for a local election to take place in May as planned, adding: “I think the last thing this country needs is a general election. I think the people will never forgive us for it, what they want is this Parliament to deliver Brexit in an orderly way, that is what they are looking for.”

He also admitted the UK would suffer “a change in capability” in terms of security if there was a no-deal Brexit because of reduced access to databases and arrest warrants.

But he added: “There will be a change in capability but it’s worth putting it all in perspective.

“Most of these capabilities were only relevant for us from 2015 onwards and I’m absolutely certain as Home Secretary ... my job is to do everything I can to keep this country safe.

“I am absolutely confident that we will continue to be one of the safest countries in the world even in a no-deal scenario.”

Nissan blasts Brexit ‘uncertainty’ as company confirms X-Trail Sunderland axe