The German economy will grow by only 0.9 per cent in 2002 and full economic recovery will not get under way until next year, according to leaked extracts from a new report by leading German economists.

The economists revise down their growth prediction by 0.4 per cent in the spring report to be published tomorrow, and warn that looming strikes could delay an economic rebound in Germany.

The IG Metall union, representing workers in the electrical and engineering industry, said yesterday it was preparing "flexible" strike plans designed to cause the maximum disruption to large manufacturers such as DaimlerChrysler and Porsche.

Union leaders meet tomorrow to discuss the action, planned for next week in the southern state of Baden-Wuerttemberg that could also spread to neighbouring Munich. The threatened strike follows the collapse of regional pay talks last week after IG Metall rejected an employer offer of a 3.3 per cent pay rise.

The news is a double blow for Chancellor Gerhard Schröder, who had hoped to face voters at next September's general election with a recovering, if not fully healthy, economy and a consensual pay agreement. Now he faces a summer of discontent and a stalled economy that refuses to start. The prediction of 0.9 per cent growth from Germany's six leading economists or "six wise men", compares to the government prediction of 1.25 per cent and will cause concern among euro-zone finance ministers.

In the new report, leaked to a Sunday newspaper, the economists write that German unemployment will only just drop below the crucial four million mark this year.

Yesterday leaders of the IG Metall union disregarded calls to put off their threatened strike action. "Nothing can stop this process now. We cannot make the strike dependent on the comments of economists," said Mr Juergen Peters, vice-president of IG Metall.