The men were released after a month in police custody on Tuesday because they were no longer under "strong suspicion" of beating the Ethiopian-born engineer into a coma. Two men had attacked Ermyas M. in April in Potsdam, outside Berlin, and called him a "dirty nigger."

According to the federal prosecutor's office, which took over the case after it attracted wide media coverage, the victim doesn't remember having been beaten up and can't identify the attackers. The two men remain under investigation, the prosecutor's office said.

Federal Prosecutor Kay Nehm has said he believes the attack was motivated by xenophobia.

The men's release from custody made headlines throughout the country in the midst of an impassioned public discussion about xenophobia in Germany. The alarm was sounded last week by a former government spokesman, Uwe-Karsten Heye, who said non-whites were not safe in some areas of former East Germany near Berlin.

"There are small and mid-sized towns in Brandenburg and elsewhere where I would advise anyone with a different skin color not to go," said Heye, referring to the state surrounding the capital.. They might not make it out alive."

Heye, now a spokesman for an anti-racism lobby, was not alone in warning of xenophobic pockets in the former communist East, where the country's neo-Nazi party has found a following among unemployed youths.

The Africa Council, a group for expatriates, plans to publish a "No-Go-Area" brochure listing clubs, bars and restaurants in and around Berlin which should give black soccer fans a wide berth.

Politician attacked

But politicians and football authorities said Heye's statement scored an own goal for a country, which has painstakingly confronted its Nazi past to earn a reputation for political correctness.

Over the weekend, the debate took another turn when a German politician of Turkish origin was beaten and his head slashed with a broken bottle in Lichtenberg, a working class part of Berlin known as a neo-Nazi stronghold. The two men who attacked Giyasettin Sayan, a regional parliamentarian for the neo-communist Left Party, called him a "dirty foreigner," police said.

Sayan's party chief in the Berlin assembly, Stefan Liebich, said the attack justified last week's warnings.

The premier of Brandenburg, Matthias Platzeck, on Sunday admitted that xenophobia was a problem in the state.

"We have to accept that it is not a problem that can be resolved from one day to the next," he said. "We have gone through a phase where we minimized and denied the problem, where we said: 'My God, if we speak about this openly we will hurt our image and then nobody will come here'."

In early January, a 12-year-old boy of Ethiopian origin was attacked by a group of neo-Nazi youths who forced him at gun-point to lick their boots in the eastern town of Magdeburg. They were jailed this week by a judge who said the color of the victim's skin was "the sole reason" for the attack.

Fear of tarnished image

The debate about whether racism is on the rise and the damage it could do has peaked less than three weeks before the World Cup kicks off in Munich on June 9, with about one million foreign fans expected to attend the tournament. The government has been running a campaign to promote Germany as an open, friendly society in the hope that those who come will return one day.

The leader of the Greens, Claudia Roth, said there was no point in hushing the debate for fear of scaring off foreigners, as recent events spoke for themselves.

"It is not talking about the far-right that threatens to harm our reputation but the very facts themselves. These are not lone incidents, but that we have a widespread, deep-seated problem with right-wing extremist violence in our country."

Over the weekend, Bild newspaper leaked an extract of a government report stating that the number of neo-Nazis in Germany had grown from 3,800 in 2004 to 4,200 last year. Interior Minister Wolfgang Schäuble released statistics on Monday saying that the number of violent crimes attributed to the far-right had risen by 23 percent in 2005.

Wilhelm Heitmeyer, a sociologist at the University of Bielefeld, blamed the poor state of the economy and the frustration it created for animosity towards foreigners.

"It is a German problem, though there is a stronger tendency in the east," Heitmeyer told the news agency AFP. "It has to do with the fear of social decline, which is greater there. If you have no standing, you start beating up on other, weaker groups."