Unless there is a dramatic turnaround in the birthrate, Germany will soon have the world's oldest population, reports Derek Scally in Berlin.

Competing for space these days on Berlin billboards with cars and holidays is another luxury item: children. Two blonde children playing with building blocks are the poster boys in the German government's latest effort to revive the ancient art of having babies. Studies show that, without a dramatic turnaround, Germans will be the oldest population in the world in 30 years' time.

The birthrate has fallen to a historical low of 1.3 children. One in six couples chooses to remain childless and large families are becoming an endangered phenomenon, with 50 per cent fewer German than American families having three children. Der Spiegel magazine warned in purple prose recently that Germany is becoming "a grey land without laughter".

A new report from the German Demographics Institute found that 11 per cent of German women and 26 per cent of men surveyed expressed no wish to have children. The report made some surprising recommendations, including a call for a radical shake-up of the notorious "long-term student" phenomenon at universities, after the study found that 40 per cent of students only achieved economic independence at the age of 28.

"The consequence is that a maximum of five to seven years are available to build up a relationship and family, with the simultaneous necessity to establish oneself in career and finances . . . a 'rush-hour'," says Prof Bertram, a sociologist at Berlin's Humboldt University, author of the report and a member of the federal government's Family Commission.

The commission recommends replacing the present child allowance of up to €300 a month with a "parent's allowance", paying parents 70 per cent of their previous income while taking care of their children, a move that could cost up to €1.2 billion annually.

"Parent's allowance would make clear that deciding to make yourself responsible for your own child is considered by society as important as career," says the report. "Such a payment also makes clear that those who take over personal responsibility for their children shouldn't have to give up their financial independence as a result."

The minister for family affairs, Renata Schmidt, has promised a proposal by early next year, but the idea may yet fall victim to the ballooning budget deficit.

Germany gave the world the kindergarten, but it has fallen behind other countries, notably Scandinavia, in prioritising childcare, Schmidt admits. "Now we have created the conditions that children will get more in the future from the government," she said of a government proposal to fund 230,000 new kindergarten places in the next five years for children aged under three.

Not everyone has waited for the government to act. The eastern Berlin neighbourhood of Prenzlauer Berg, once the centre of post-unification wild living, has bucked the childless trend to become the munchkinland of Berlin, where tiny beings swarm around neighbourhood playgrounds at the weekend.

More than 800 more children were born here in 2003 than in 1999, and the current birthrate is 2.1 children, well above the 1.8 children required to keep the population numbers stable. The child boom here goes back to parent pragmatism: rather than wait for government initiatives, families worked together to open 174 private kindergartens. Now the streets are dotted with shops selling toys, prams and children's books.

"So many students moved here from the west in the early 1990s, and now they are all having children," says Anna Ebeling, a Prenzlauer Berg resident expecting her first baby in September. "Perhaps they're just better at organising themselves rather than waiting for the government."

As playgrounds empty in the rest of Germany, bookshop shelves are clogging up with titles such as Child or Career?, The Baby Trap and Relationship Backlash, which contain grim warnings of unsatisfying sex lives and reminders that only half of the 400,000 women who become mothers each year return to work.

But not all the books are doom and gloom. "Children require strong nerves," writes columnist Axel Hacke in his Little Child-Rearing Manual. "Try to strengthen yourself psychologically . . . take the train at rush-hour; stand in the home stand of FC Bayern and wave the yellow and black flag of Borussia Dortmund."

The key proposal of Bertram and his commission experts is to follow the findings of Catherine Hakim, a sociologist at the London School of Economics. Her "preference theory" divides mothers into three groups: full-time workers, household-oriented women and "adaptive" women who combine part-time work with child-rearing. More than 60 per cent of German women meet the "adaptive" criteria, according to the report, making clear the pointlessness of existing homogenous child-rearing policies.

The Family Commission was asked to answer the riddle of how German women could be encouraged to have more children. The commission's answer? "Ask the women."