German firms accused of employing slave labour during the war have ruled out making any more cash available to boost a proposed compensation fund.

Threatened with a series of law suits by survivors of Hitler's slave labour programmes, the firms have been negotiating for months to establish a voluntary compensation package.

Some 30 companies, including some of the giants of German industry such as Siemens, Volkswagen and Daimler Chrysler, have admitted using slave labour during the war and they are ready to participate in such a fund.

Otto Graf Lambsdorff urged firms to increase their offer

But a spokesman for the firms, Wolfgang Gibowski, said on Saturday that they could not raise their contribution above the $2.1bn already on the table.

Survivors groups are looking for a sum of well over $5bn.

Talks in Washington on Friday were reported to be making progress, with the German government negotiator, Otto Graf Lambsdorff, saying they would consider increasing their billion-dollar contribution and he urged the German firms to do the same.

'Unacceptable'

The fund's organisers are having difficulty convincing more companies to contribute.

Their spokesman said there was a direct relationship between the number of firms involved and how much money was on the table.

The Central Council of German Jews said the refusal to raise the offer was unacceptable and inexplicable. Estimates vary but between 700,000 and 2.5 million survivors could be eligible for compensation.