German high-technology companies are much more likely to invest in China, India or eastern Europe than Britain, and have a low opinion of its research capabilities, according to a British government-funded survey published on Tuesday.

The survey findings, launched in Berlin, make awkward reading for UK Trade and Investment, the government's inward investment agency, which commissioned the study.

While Britain retains its place as a traditionally important base within Europe for German companies, future investments are likely to be concentrated in other regions, with not only the Far East but also the US and France performing better than Britain as "an investment destination of the future" for German companies, according to the survey.

The 400 surveyed companies - from sectors including life sciences, renewable energy and information technology - see Britain as an attractive and strategically important economy, but are less impressed by skills levels and research standards.

While 45 per cent of companies praised Britain as an "interesting economic region", only 19 per cent were equally positive about the view that Britain was "taking a leading role in research".

In addition, the companies highlighted certain factors that were important in influencing where to invest, such as that new product markets existed, that local laws were uncomplicated, and that investment subsidies were provided. In each case most of the companies thought Britain did not meet these criteria. It did well on its language, its "political stability" and its proximity to Germany.

Sir Michael Arthur, ambassador to Germany, said the challenge in dealing with the results lay less with improving investment conditions in the UK than with correcting what he saw as the inaccurate views among German companies.

"The problem is with the companies' perceptions" he said.

In order to balance the critical aspects of the survey, the Düsseldorf office of UK Trade and Investment on Tuesday issued its own report highlighting positive points about Britain, such as that at present 1,949 German companies operate in the UK, compared with 771 German companies in China.

British universities are ranked higher than German ones in international league tables, the report adds.