Hundreds of new jobs are to be created under a £100 million investment in a new wind turbine research centre, it was announced.
Mitsubishi said it was looking at a number of sites in north east England to carry out research into building the world's biggest turbine blades.
The Government is supporting the development with grants of up to £30 million.
Up to 200 skilled jobs will be created over the next few years but business secretary Lord Mandelson said the move could lead to the creation of up to 1,500 jobs in the future.
Lord Mandelson and Climate Change Secretary Ed Miliband signed a memorandum of understanding with Mitsubishi executives at the Business Secretary's London offices to mark the investment.
Mitsubishi chief executive Akio Fukui said the firm was looking at a number of locations in the North East where a factory will be built for the research to be carried out.
A prototype turbine will be built within three years and the first full-scale production will start after four years.
The turbines will be for offshore wind farms and will be offered for sale in overseas markets such as Germany, the United States and China as well as the UK.
Lord Mandelson said the announcement was a "real opportunity" for the UK to become a world leader, adding: "No country makes offshore wind turbines of the size we are talking about today on a commercial scale. Twenty years ago the UK was a leading centre for onshore wind technology, but we failed to capitalise on that by not providing the right climate for growth.
"We are determined not to let that happen again. We are creating the largest market in the world for offshore wind and we intend to build and support the industry."