It's been a bad week for what Germany calls traditionsreich companies - long-established firms steeped in tradition.

Yesterday's news that the Kirch media group is strictly "do-not-resuscitate" comes after Philipp Holzmann, one of Europe's largest construction firms, filed for bankruptcy after 150 years in business.

The two companies had much in common despite operating in very different industries. Both were life members of "Germany Inc", the elite group of political and business leaders who rub shoulders, make deals and bail each other out of trouble.

But Kirch and Holzmann had other striking similarities. Both companies were as steeped in debt as tradition and both companies collapsed after failed rescue attempts by leading politicians.

New statistics show that increasing numbers of traditionsreich companies are going to the wall.

"Germany Inc" is haemorrhaging members, and banks and politicians are no longer willing to bail them out," said Mr Rüdiger Pohl, president of the Institute for Business Research in Halle.

"Their former solidarity was equal parts honourable, self-serving and disreputable: to save jobs, save capital and to keep foreign interests from stumbling businesses," he said.

German businesses used to rely on credit to survive but German banks now face ruthless competition from foreign rivals and can no longer afford to pour money into risky ventures.

Business leaders then turned to politicians for help. This worked for a time with limited success, such as in 1999 when Holzmann was on the verge of bankruptcy with debts of €1.4 billion.

German Chancellor Mr Gerhard Schröder flew through a snowy November night to the company's headquarters and announced a government bail-out to save the company and more than 100,000 jobs.

Mr Schröder was the hero of the hour but when the company went under last week he faced criticism that he had wasted taxpayers' money to keep alive a dying firm.

One of his loudest critics was Mr Edmund Stoiber, who hopes to unseat the Chancellor after September's general election. He faces his own difficulties as a key player in the collapse of the Bavarian-based Kirch media group.

Mr Stoiber helped finance Kirch's ambitious expansion into pay-television that eventually brought down the company. The board of the Bavarian State Bank, half-owned by Bavaria and packed with Stoiber cronies, approved more than €2 billion in soft loans to Kirch, which it will never see again.

"Mr Stoiber was nominated as the ideal candidate who could sell himself as the successful premier of an economic wonderland," said Mr Richard Hilmer, of the Ifratest polling institute. "Kirch is worse than Holzmann because Kirch had strong links with politics. This is something Mr Stoiber should fear."

Mr Stoiber tried to distract from his own woes yesterday. He attacked government plans to subsidise football clubs if Kirch could not pay them more than €300 million in television royalties this year.

"With four million unemployed, it's scandalous for the government to use tax money to support football teams. That's not the role of the state," added Mr Stoiber.

In the end, football-mad Chancellor Schröder scored an own goal and the government's offer was withdrawn yesterday.

Evidence of the demise of Germany Inc can be found in statistics released yesterday. The number of German companies registering for bankruptcy grew by a third to more than 32,000 last year.

"In the 1990s, it was more smaller firms that went bankrupt. Today, bankruptcy is hitting ever larger, more established companies," said Mr Jürgen Angele, of the federal statistics office in Wiesbaden.

With bankrupt companies now leaving behind average debts of €850,000 each, the one-time solidarity of Germany Inc has become too expensive. German banks and politicians appear to have a new maxim: "Let dying companies die."