The electrical conductivity of biodegradable polymeric scaffolds has shown promising results in tissue engineering, particularly for electrically excitable tissues such as muscles and nerves. Herein, we demonstrate a novel processing approach to produce electroactive nanofibres. Electrically conducting, robust nanofibres comprising both a biodegradable component using poly(ε-caprolactone) (PCL) and a conducting component, polypyrrole (PPy), have been produced by electrospinning and vapour phase polymerization. The PCL/PPy nanofibres were characterised in terms of morphology, electrical conductivity, and dimensional stability. The as-prepared nanofibres were found to be cytocompatible with good electrical conductivity and mechanical properties. It was found that electrical conductivity of the PPy coated PCL nanofibre was 1.9 S/cm, which is much higher than that of PCL mixed with PPy in other studies. Cell viability on the scaffolds were firstly examined by in vitro culturing the L929 fibroblast cells for 24 h, revealing viability of 97.6 ± 2.7 %. Then PC12 cells differentiation observed by neurite outgrowth which occurred after 4 days of culture on the scaffolds. Significantly larger areas of the PPy coated PCL were covered by cells compared to PCL without coating. The obtained results from filament staining suggested the high potentials of the conducting scaffold for use in neural tissue engineering.