We must recognise that to secure our prosperity, our future, we are dependent on people from other countries with skills that we desperately need

Commission chair Rita Suessmuth

The BBC's Rob Broomby in Berlin says the report comes as Germany faces a massive demographic problem.

A low birthrate means the population is set to drop by as much as 23 million over the next 50 years.

Experts have argued that Germany may need massive immigration of skilled labour to stave off economic decline and to maintain the lavish social security net and pensions system.

"We must recognise that to secure our prosperity, our future, we are dependent on people from other countries with skills that we desperately need," Professor Suessmuth said.

The Commission recommends that Germany should gradually increase immigration, climbing according to need towards the end of the decade and beyond.

According to the report:

• 20,000 foreigners should be allowed in based on professional qualifications and their knowledge of German
• 20,000 places should be reserved for industries which demonstrate need
• 10,000 students be allowed in for training and employment

The Commission warned, however, that efforts would have to be made to integrate the new arrivals into German society.

Election worry

Our correspondent says that government hopes of building a cross party consensus to keep the issue out of the next election campaign appear to be fading.

This is despite the choice of the highly respected Professor Suessmuth as the Commission chair.

The government is to publish its own legislation in September and the opposition Christian Democrats will then decide whether to give their support.

The CDU has a history of opposing immigration

The report was published a day after the Council of Europe, the Strasbourg-based human rights watchdog, called on Germany to combat what it described as a rising tide of anti-Semitic and racist violence in the country.