BERLIN - CHANCELLOR Angela Merkel's declaration that Germany's attempts to build a multicultural society had 'utterly failed' is feeding a growing debate over how to deal with the millions of foreigners who call the country home.

Dr Merkel told a meeting of young members of her conservative Christian Democratic Union that while immigrants are welcome in Germany, they must learn the language and accept the country's cultural norms - sounding a note heard increasingly across Europe as it battles an economic slump and worries about homegrown terrorism.

'This multicultural approach, saying that we simply live side by side and live happily with each other has failed. Utterly failed,' Dr Merkel said. Dr Merkel's comments were met with applause by the more conservative members of her party, but some Germans in cosmopolitan Berlin argued on Sunday she was out of touch with the country's daily life.

'I think her statement is very black and white and does not reflect honestly the lifestyle people are living here,' said Daniela Jonas, a German setting up a flea market in the city's diverse Kreuzberg district, where immigrants and native-born Germans live among each other.

Germany and other European countries have grappled with the idea of themselves as immigration nations and Dr Merkel has long been skeptical of the country's attempts to build a multicultural society that includes its estimated 5 million Muslims.

Many immigrants speak little or no German, work in low paying jobs or live off of government handouts at the same time the country faces an ageing population and a shortage of highly skilled workers. 'Germany needs more qualified immigration to maintain its economic advantage and deal with the demographic developments,' Volker Beck, a lawmaker with the opposition Greens party said on Sunday.

Social crisis in Germany