Volkswagen on Thursday attacked biofuels made from food crops as unsustainable, setting the German carmaker at odds with President Bush, US carmakers and European governments, which have all been touting ethanol as an environmentally friendly alternative to petrol in cars.

Bernd Pischetsrieder, chief executive, called on politicians to lower tax breaks for current "first-generation" fuels - made in the US and Europe from corn, wheat, rape seed and sugar beet - and instead provide financial support for new second-generation technologies that promise big cuts in carbon dioxide.

Mr Pischetsrieder said some of the current biofuels were "totally pointless" and "like a wolf in sheep's clothing". He criticised tax benefits that were not linked to carbon dioxide, since some methods of refining biofuel actually led to higher carbon emissions than from petrol.

"The current situation is totally unsatisfactory, both from the environmental and economic standpoint," he said.

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The handful of opponents of the fuel in the environmental movement have mostly been concerned about increased leakage of carcinogenic fumes, development of monoculture farms and the danger to rainforests from new palm plantations in developing countries, particularly Malaysia and Indonesia.

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In the long run, we're all dead. John Maynard Keynes