Accusations that professors are using university laboratories as "private offices" and are involved in the unauthorised use of European Union resources as well as extensive tax evasion are assuming the proportions of a major scandal in Greece.
Kostas Simitis, the secretary of state for trade and industry, and Nicos Christodoulakis, the secretary general of the research and development department, claimed that a number of university professors were plundering huge community resources while depriving the state of important research benefits and a large number of teachers.
Some professors, although exclusively employed by universities and in receipt of a special 35 per cent additional pay award, have formed non-profit-making companies with friends and relatives through which they bid, and often underbid, for EU-financed projects.
The companies are formed for the occasion only, and lack structure, funds and any track record in research and development. They then subcontract projects to the professors, who term them "educational research" and use university laboratories, equipment and staff free of charge to carry them out. Their resulting huge profits are thus not liable to taxation.
It is estimated that in the past few years nearly 400 million drachmas (Pounds 1.1 million) has been diverted in this way, while the loss to the state in research and man-hours is incalculable.
Now the research and technology department is re-examining all applications for European research funds, and is to carry out an investigation into the allegations. The attorney-general is to investigate the possibility of widespread tax evasion.
The principals' conference, meeting in Crete when the news broke, asked the secretary of state to publish the names of those involved to protect the rest of the academic community from innuendo.
Nicos Markatos, principal of the technical university, claimed that when he reported a similar case some six months ago the ministry took no action.
"I am afraid that hiding behind all this noise are probably the interests of some large private firms which would dearly love to see research stop at the universities and funds already approved re-allocated," he said.
Without denying that some cases may need to be investigated, Mr Markatos defended university practices, saying that they are mostly carried out in a proper and legal manner.
Mr Christodoulakis said that the government intended to establish new regulations in order to ensure the fair and objective allocation of funds and that all recent bids will now be re-examined.