A bitter dispute over Asian immigration and government subsidies to aborigines has alarmed senior academics in Australia.

They have warned that the tenor of a national debate about race could damage the reputation of Australia's education institutions in Asia and their capacity to generate more than Aus$1 billion (Pounds 500 million) a year in fees from foreign students.

The issue was triggered by the maiden speech of Queensland politician Pauline Hanson in parliament in which she attacked Australia's immigration policy and said Aborigines were receiving preferential treatment in education, social welfare and health.

Her claims then and in later addresses that there were too many Asians in Australia and that Aborigines received more assistance than white Australians have been startlingly endorsed by callers to talk-back radio stations and in the thousands of letters she has received.

ÁñÁ«ÊÓƵ

The Australian Vice Chancellors' Committee has joined other critics in attacking the federal government's low-key stance on race and has called on Prime Minister John Howard to act.

AVCC president Fay Gale said the vice chancellors wanted to make clear that racism was not tolerated in universities.

ÁñÁ«ÊÓƵ

"The AVCC urges the prime minister to act swiftly and decisively to dispel these ideas which have the potential to do so much damage," said Professor Gale.

She said international students were important to Australia's higher education system.

Although the prime minister has been asked to condemn Ms Hanson's views he has so far refused.

His comments that people are now not so dominated by "political correctness" as they were under the Labor government appear to have given some legitimacy to the racially intolerant.

ÁñÁ«ÊÓƵ

A survey by Kee Pookong, director of Victoria University's centre for Asia Pacific Studies in Melbourne showed almost half the Taiwanese students in Australia have experienced racial discrimination and 15 per cent have been subject to physical attack.

Racial discrimination often occurred in students' own institutions.