No paper for Zimbabwe banknotes

Zimbabwe's economic situation is dire

A German company which helps Zimbabwe supply its banknotes has become the latest firm to end links amid outrage over the situation in the country.

Giesecke & Devrient said it would stop providing paper for banknotes immediately following a "political and moral assessment" of conditions there.

Foreign firms in Zimbabwe are under pressure to pull out after President Mugabe's controversial re-election.

The UN is considering tougher economic sanctions against his regime.

'Political tension'

The UN's Security Council has outlined a resolution calling for further measures against Robert Mugabe and key allies following Friday's unopposed presidential vote, which the US, UK and other countries dismissed as a "sham".

A senior British minister recently warned that the "game was changing" for foreign firms operating in Zimbabwe and urged businesses to reconsider their investments in the light of further action by the international community against Mr Mugabe.

Our decision is a reaction to the political tension in Zimbabwe, which is mounting significantly Dr Karsten Ottenberg, Giesecke & Devrient chief executive Business risks mount in Zimbabwe

British supermarket chain Tesco said on Monday that it would no longer buy produce from Zimbabwe, ending about £1m worth of trade.

Giesecke & Devrient said it had taken the decision to withdraw from Zimbabwe following an official request to do so from the German government.

"Our decision is a reaction to the political tension in Zimbabwe, which is mounting significantly rather than easing as expected," said chief executive Dr Karsten Ottenberg.

The decision had been influenced by the hardening of the international community's stance on Zimbabwe and by public opinion in Germany, he added.

Hyperinflation, which has risen as high as 165,000% on an annual basis, has hit Zimbabwe's economy and accelerated the political crisis in the country.

The African Union has called for a government of national unity to be formed including opposition leader Morgan Tsvangirai who boycotted Friday's poll following widespread violence against his party's supporters in the run-up to the election.