Austerity measures announced by Berlin's higher education senator Peter Radunsky have prompted a wave of outrage in its three universities. More than 26,000 students and university staff demonstrated against the city government's plans last month.

Representatives of the Free, Technical and Humboldt universities say that the latest cuts, amounting to just under DM200 million (Pounds 87 million), would jeopardise undergraduate training and recruitment. They also maintain that Christian Democrat Mr Radunsky's plans are unacceptable in view of Berlin's future role as the capital of Germany.

Industrialists say higher education could and should play a vital role in helping Germany to save and consolidate its position as a leading nation. In talks with the German Industrial and Trade Association (DIHT) and the National Union of Employers' Associations (BDA), the Rectors' Conference (HRK) was told that industry and commerce were eager to step up cooperation with higher education.

The DIHT is worried about the decline in undergraduate numbers in engineering and natural sciences. It fears that graduate output will probably not meet industry's demand in the next few years.

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In the medium term this could result in production being transferred abroad and research and development activities being established outside Germany.

This could pose a considerable threat to Germany's future as an industrial nation, the organisation warns. For example, Thuringia's state government has closed down the mathematics and natural sciences faculty of Erfurt's teacher training college owing to dwindling student numbers.

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There is also concern about a decrease in the number of foreign students and researchers opting for German higher education. DIHT president Hans Peter Stihl and HRK president Hans-Uwe Erichsen have called on state and federal governments to boost their education efforts.

The Christian Democrat/Liberal government is considering massive cuts in public spending because of the huge budget deficit resulting largely from unification. There are also talks on the cost of ancillary wages, the level of which has been a constant source of complaint on the part of industry, which wants to boost Germany's competitiveness.

Higher education has already been hit hard by cuts at state government level. At a meeting of the HRK with the BDA, Karl-Heinz Rock, the president of the Conference of Cultural Affairs Ministers, conceded that governments were giving higher education a rough time. But he also stressed that the problem of studies taking too long had still not been solved.