A £500m deal for 14 new trains has secured hundreds of jobs at Hitachi’s factory in north-east England.

The rail operator FirstGroup plans to use the five-carriage trains on its open-access services running from London, and has an option for an additional £460m investment if more services are granted.

Keir Starmer visited the Hitachi factory at Newton Aycliffe on Friday to mark the deal.

The prime minister said he was honouring a pledge made in a pre-election visit to secure more work, when he had warned that the rail manufacturing sector was “teetering on the brink” and that the Hitachi workforce was “staring down the barrel of devastating job losses”.

Declining rail orders had left the plant and its 700 staff mired in uncertainty.

Starmer said: “Last time I came, they were anxious, because they feared there was going to be a gap between the contract they’re working on now and the next contract. They knew what a gap means, which is that people might lose their job – huge impact.”

The 14 new trains will be battery electric or bi-mode, meaning they will run on diesel and electricity, leased under a deal financed by the rolling stock lessor Angel Trains. They will be used on First’s open access routes including Hull Trains, Lumo, and a planned service from London to Carmarthen.

While most passenger train operations under contract to the Department for Transport will be nationalised under Great British Railways, Labour said that it would preserve the small, popular and private open access services.

Despite the boost to the UK plant, the chair of the Japanese manufacturing group, Toshiaki Higashihara, warned that it remained at risk unless the government revived the northern leg of HS2 or developed other plans requiring trains.

Higashihara told the Financial Times that jobs could not be guaranteed unless demand increased. He said that if the wider HS2 plan, scrapped last year by Rishi Sunak, “stays cancelled, then the volume of work at Newton Aycliffe goes down”, adding: “If the Labour government doesn’t re-examine plans within one year, it’s going to be a problem.”

Nonetheless, the Hitachi chief director of UK and Ireland, Jim Brewin, said the FirstGroup contract was “a positive step forward, and just recognition for the hard work and patience of our teams across the Hitachi Rail UK business over recent years”.

The FirstGroup chief executive, Graham Sutherland, said it would “significantly increase our open access portfolio over the next few years, with further expansion possible should our recent applications be successful”.

He added: “The new trains will support UK manufacturing and offer customers more choice as they consider affordable, environmentally friendly modes of travel in the future.”

The north-east mayor, Kim McGuinness, said the deal was “great news for Christmas for workers at Hitachi in Newton Aycliffe”.

The plant was opened in 2015 as part of a government contract to supply trains for the East Coast and Great Western Railway operators.

Hitachi has been awarded the contract, shared with another manufacturer in the UK, Alstom, to build HS2 trains to run on the line between London and Birmingham, but delays and cuts to the high-speed project have made the pipeline of work uncertain.

Alstom staved off its own fears of closures and cuts at its Derby plant by securing an order for more Elizabeth line tube trains this year.