German labour minister Wolfgang Clement has attacked the country's leading economics institute after its closely-watched index of business confidence slumped to a two-year low.

Mr Clement dismissed as "curious" and "of little meaning" the latest Ifo index report yesterday, showing the German business climate falling in May to 92.9 points from 93.3 the previous month, levels not seen since the economic slump of 2003.

"We have the best economic prospects for many years," said Mr Clement after the release of the 1 index, Germany's most influential economic indicator.

The fall was influenced by falling oil prices and the weakening of the euro against the dollar. The Ifo's president, Prof Hans-Werner Sinn said: "An economic recovery is not to be expected in the next months."

Those months will be dominated by a general election, brought forward by a year by Chancellor Schröder. An ongoing slump would ruin the government's election chances and explains Mr Clement's attack.

An Ifo spokeswoman brushed off Mr Clement's attack, saying: "The figures are the figures - we have no influence on that."