Carlos Ghosn, the troubleshooting chief executive of both Nissan and Renault, has been awarded an honorary knighthood for his contribution to economic ties between Japan and Britain.

"I am deeply honoured by this recognition from the United Kingdom," Mr Ghosn, 52, said in a statement.

"The ties between Nissan and the United Kingdom are deep and stretch back over 50 years. This honour is dedicated to the hard work and achievements of our 5,500 employees and 220 dealers that support the Nissan business in the United Kingdom."

Nissan's UK operations have improved under Mr Ghosn. The firm's plant in Sunderland, the most productive in Britain, is expected to be producing 400,000 vehicles a year from 2007.

Earlier this earlier this month Nissan said it had chosen the Sunderland plant to produce the Qashqai, a small 4x4 car that will be exported to Europe, Japan and the Middle East, creating around 300 new jobs in the process.

The plant is expected to produce 130,000 of the cars a year when production starts in December.

Mr Ghosn became a household name in Japan after rescuing Nissan from near bankruptcy - the firm was $20bn (£10.7bn) in debt - in 1999 and turning it into one of the world's most profitable carmakers.

Nicknamed "Mr Seven-11" by the Japanese for his work ethic, Mr Ghosn, who divides his time between Japan and France, was behind recent attempts to forge an alliance between Renault, Nissan and General Motors, the world's biggest carmaker.

But the talks broke down after Nissan and Renault balked at compensation demands by GM, which is facing a strong challenge for the top spot from Toyota.

Mr Ghosn, who was born in Brazil to Lebanese parents and educated in France, will not be able to use the title "Sir" because he is not a British citizen.

In 2004 the Japanese emperor, Akihito, awarded him the Japan Medal with Blue Ribbon in recognition of his role in turning around Nissan's fortunes.

Other foreign recipients of the KBE include Microsoft's Bill Gates and Sony's co-founder, Akio Morita.