German university rectors have criticised politicians for awarding generous state grants to private universities at a time when the state universities are suffering funding and job cuts.
Klaus Landfried, president of the conference of university rectors, HRK, said this would lead to a two-tier system of higher education in Germany.
He said it was unfair that Social Democrat (SPD) states in particular were refusing to allow state universities to charge fees while funding private universities that can charge fees. "Private universities should be financed privately," he said.
The HRK is especially angry about the new private International University, Bremen, which has received E118 million (Pounds 79 million) start-up funding from the Social Democrat state of Bremen.
This compares with Bremen's total state higher education budget of E205 million a year.
Bremen's SPD education senator, Bringfriede Kahrs, has assured critics that the state university sector need not fear that support for the private university will lead to cuts. Much of the funding for the International University came from the finance ministry budget, she said.
The controversial private university has been criticised by the SPD's youth wing but has won the support of Greens, who claim that the technology park that will develop around it could be a boost for the financially ailing city state.
Fritz Schaumann, the president of the International University, Bremen, said he is convinced that competition between private and state universities would help both sectors to develop.
Yet critics of the rapid development of Germany's private university sector cite the private university of Witten-Herdecke, which has won acclaim for its academic achievements but has suffered financial difficulties and has needed extra state aid.
There are now about 60 private universities in Germany. Politicians and industry increasingly see them as elite alternatives to state universities, which still educate 98 per cent of students but are overcrowded and hard to reform.