Many German companies will suffer due to the debt standstill called by Dubai, the managing director of Germany's DIHK chambers of industry and commerce said on Saturday.

Martin Wansleben told the Neue Osnabruecker Zeitung newspaper that many German firms have played instrumental roles in the building boom in Dubai over many years.

'A lot of German companies will be hurt,' Wansleben said.

'Dubai has been a permanent construction site over many years and an important market for many companies whose products and services are involved in construction - everything from drills to excavators and from fittings to windows.'

He said the psychological impact of the crisis in Dubai could also have shock waves in Germany.

'In the current fragile situation, every setback is dangerous. Considering all that, the news from Dubai came in like a bombshell. It shows we're going to have to deal with more setbacks down the road as well.'

The crisis flared on Wednesday when Dubai, part of the UAE federation, asked to delay payment on billions of dollars of debt issued by conglomerate Dubai World and its main property subsidiary Nakheel, developer of three palm shaped islands that once attracted celebrities and the super-rich.-Reuters