The start of Socrates, the European Union's central education programme which includes student exchanges, faces delay because of a dispute over its Ecu860 million (Pounds 660 million) budget.

This week Germany was unexpectedly blocking agreement by member states at the end of conciliation under the post-Maastricht co-decision-making process between the European Parliament and the Council of Ministers. Both Britain and Germany have been watching the budget carefully, but insiders say there has been no disagreement over the content of Socrates during the three-month conciliation process.

A Parliament-Council conciliation committee eventually decided on Ecu860 million for Socrates. It only remained for the member states to finalise the agreement for the programmes to go ahead, but Germany blocked the deal.

A spokesman for Edith Cresson, the new commissioner for education and research, said that although the amount of funding had been agreed, differences centred on whether these represented a ceiling or were "indicative amounts". The United Kingdom, unlike Germany, accepted the agreement.

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A further meeting to try to reach agreement will now have to be held but the spokesman said: "If they do not reach an agreement now the council has to go back to the Ecu760 million agreed in June."

This raises the fear that if the Parliament stands firm, the programme will be further delayed.

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Erasmus is initially unaffected. Its budget is firm for the first two years of the five-year programme and subject to negotiation only for the remainder. Decisions on the 1995/96 applications, submitted last October, are expected shortly and are said not to be affected.