BONN (Reuters) - A decade ago, when Germany's chancellor and the country's parliamentarians packed up to move to Berlin, the future seemed bleak for the small Rhineland city of Bonn they left behind.
Today, Matthias Schultze, who works in Bonn for a U.S.-Korean project developer, sees a buzzing new city when he looks out of his office window in the building that used to house Germany's parliament.
Forty years after John le Carre set his thriller "A Small Town in Germany" in Bonn, the city that was West Germany's Cold War capital is still home to six ministries and a new cluster of information technology and development groups.
Although it is only one one-tenth the size of Berlin, it is outperforming the new capital in terms of jobs, its population is growing and science centers have given it a new face.
IT specialists and United Nations workers pour out of skyscrapers to lunch by the River Rhine, negotiating their way around a large construction site for a new conference centre.
"It's a campus atmosphere. So dynamic!" said Schultze, whose firm organizes conferences in the former plenary building.
Bonn is doing so well that a new interior ministry report about its stellar performance has sparked calls to move the last ministries -- once seen as a lifeline for the city -- to Berlin.
With Germany's federal election just a year away, Chancellor Angela Merkel -- who grew up in the Communist East -- has made clear she is against reopening an emotional and divisive issue.
But several lawmakers from across the political spectrum have vowed to address it in upcoming talks on the 2009 budget.
"We must concentrate the ministries in Berlin," said Ole Schroeder, a budget expert from Merkel's Christian Democrats.
More people are still working for the government in Bonn than in Berlin, some 480 km (300 miles) away: for Gesine Loetzsch, a senior budget official from the far-left Left party, this is an anachronism.
"Many (civil servants) fly from Bonn to Berlin to take part in meetings that last only 30 minutes. That's unacceptable, both from an economic and an environmental point of view," she said.
The German taxpayers' federation BdSt estimates the flights alone cost some 9 million euros ($13 million) per year.
But Bonn defenders say a complete government move would be even more expensive and hurt the picturesque birthplace of composer Ludwig van Beethoven.
Located near the Belgian border, Bonn became West Germany's capital after the country's post-war division, while East Berlin became the capital of Communist East Germany.
The decision made clear that Bonn, neither an industrial nor a political centre, was only meant to be a provisional capital until reunification. After the Berlin Wall fell in 1989, parliament decided to move to Berlin in a bitterly close vote.
To soften the blow, several ministries -- including the development and environment portfolios -- stayed in Bonn and some federal agencies moved there. Bonn also received some 1.4 billion euros in aid to help it restructure.
Privatized companies Deutsche Post and Deutsche Telekom, two of Germany's top firms, constructed gleaming new buildings in the university city, and as some U.N. organizations moved there, many non-governmental organizations followed.
"We came to Bonn in 1999 specifically because the development ministry and many aid groups were here," said Christoph Bongard from Forum ZFD, which sends development experts around the globe. "Berlin was never an option."
In Berlin's 3.4-million-strong city, suit-wearing politicians now mix with artists, workers and students. In Bonn, cafes are filled with aid workers drinking latte macchiattos and discussing their missions, as IT workers sip a beer.
"To us, it doesn't matter that the government is no longer here," said Till Adams, who set up his IT firm terrestris in Bonn six years ago. "It's a clear advantage that so many firms in our sector are based here. It's a cluster."
Bonn lost about 24,000 political, media and lobbying jobs in 1999 but the number of people employed in the area rose 12 percent between 1996 and 2006, compared with a rise of 4.2 percent in Germany overall.
Mayor Baerbel Dieckmann said the risks to Bonn would be huge if the remaining government institutions were to move.
"This is not about 9,000 jobs in the ministries," she told Reuters. "If they moved, it would endanger sectors with large synergies, such as research, development and the environment."
Bonn hosted the U.N. biodiversity conference this year, and international leaders have met here to debate issues ranging from Afghanistan to climate change.
Conference organizer Schultze said the mix of scientific, public and private institutions made Bonn attractive.
"If the ministries were to move to Berlin ... we would certainly feel the economic effect," said Schultze, vice-president of SMI Hyundai Management GmbH, which is building a new hotel and conference space in Bonn.
Bongard from the Forum ZFD group shares the concern: "The development ministry is our most important financial partner. If it moved, we would have to think about following."
But some in the sector are already heading eastwards.
Evangelischer Entwicklungsdienst (EED), a Protestant aid agency, sparked a storm in Bonn's development community when it recently announced it would move to Berlin.
Although EED's main reason was a merger with another Protestant group there, chairman Konrad von Bonin said EED had thought about strengthening its Berlin presence for years.
"Berlin is the political centre. That's where the future is," he told Reuters. "Bonn is a lovely, medium-sized city. But you just cannot compare it to the metropolis Berlin."
Editing by Sara Ledwith and Clar Ni Chonghaile