UPDATE 2-Nissan to invest in UK, Portugal battery plants

* Carmaker says to invest 200 million sterling in UK plant

* Also to invest 250 million euros in Portugal

* Plants will produce electric car batteries

* Move will be supported by government grants (Adds details on Portugal plant)

LONDON/LISBON, July 20 - Car manufacturer Nissan said on Monday it will invest almost $700 million in two plants to make batteries for electric cars in Britain and Portugal after securing financial support from their governments.

Automakers around the world are exploring plans for mass electric car production as the industry seeks to haul itself out a devastating downturn.

The Nissan news comes less than a week after Toyota said it would produce its first European-built hybrid car in Britain from 2010. A hybrid car is part-powered by electricity and is more fuel efficient than traditional vehicles.

In Britain, Nissan will invest more than 200 million pounds ($328.6 million) in the plant near Sunderland, north east England.

"The two governments (UK and Portugal) have offered to extend financial assistance and other support to ensure that Nissan locates the proposed plants within their respective countries," Nissan said in a statement.

Nissan will also build a similar plant in Portugal as part of its plan to manufacture and sell environmentally friendly electric cars. The location for the 250 million euro ($354 million) plant, which should create 200 jobs, is yet to be chosen.

Each plant would produce 60,000 batteries a year.

Nissan's investment in Britain will come over five years, and will be supported by grants and loans from the UK taxpayer.

A Nissan spokeswoman said the details of grants had yet to be finalised, but added that the firm was also in talks with Britain over where to locate the production of electric cars.

An announcement is expected later this year.

UK Prime Minister Gordon Brown said the project would create 350 new jobs and safeguard hundreds more in the supply chain.

"Nissan's investment in a new battery plant ... here in Sunderland is great news for the local economy," Brown said in a separate statement, although Nissan axed around 1,200 jobs in the area in January.

Nissan is the biggest car manufacturer in the UK by volume, while Toyota is the fourth largest.

In Portugal, the deal follows a deal last year between the Portuguese government, Nissan and its French partner Renault to build 1,300 charging stations for electric cars by the end of 2011.

The car-making alliance will start deliveries of its electric cars to Portugal in early 2011.

Nissan plans to have battery production factories in the United States, Europe and Asia.