The Advertising Standards Agency (ASA) said the term "Kraut" was "a light-hearted reference to a national stereotype unlikely to cause serious or widespread offence".

But Germans have objected to the ruling, saying the term is offensive.

The ASA verdict followed a complaint about a direct marketing leaflet advertising sanding disks made by a German company.

Sent out just before the England's World Cup qualifier against Germany in September, the leaflet read: "The Krauts are coming - with unbeatable quality."

'Not nice'

DRONCO Abrasives said the term was a "humorous reference to Germans' allegedly high consumption of sauerkraut".

But a German Embassy spokesman said "It is offensive.

"If you were called cabbage, you would not like it. It is the same for us."

The cultural attache, Tilman Hancker, added: "Speaking personally I would be offended to be called it and I think most people would not find it a very nice name."