Angela Merkel's government said to be consdiering new tax to foot the bill

A new study in Germany released on Monday puts the cost of the country's refugee crisis at £38 billion - and rising.

The German Economic Institute, which is based in Cologne, put together a projection for feeding, housing and educating the children of one million-plus migrants who have entered the country.

Angela Merkel's government is reported to already be dreaming up new ways of taxing people - in what is already one of the most heavily taxed countries in the world - to help foot the bill.

The German Economic Institute in Cologne puts the cost of the country's refugee crisis at £38 billion - and rising. Pictured, migrants wait after they arrived in the first registration camp of Erding, near Munich

If the Cologne experts are correct, the German finance ministry will have to seek new credit to pay for the migrants by the end of this year.

'A critical review of expenditure is required to avoid new debt,' wrote the study authors.

The figures, which are estimates for this year and next,come at a worrying time for the government which is on the ropes following the mass sexual frenzy in Cologne on New Year's Eve and fighting to restore the trust of voters expected to punish it in vital regional polls in March.

Tensions remain high among many communities in Germany where migrants are housed and police have warned they fear rising levels of violence in the near future.

Angela Merkel has been heavily criticized over her 'open border' policy, which resulted in 1.1million refugees and migrants entering Germany last year.

When hundreds of thousands of migrants were arriving in the European Union last year on the shores of Italy and Greece, Germany made a bold decision: all refugees from the civil war in Syria would be welcome, regardless of where or how they entered the EU.

The Chancellor said Germany was a rich country that could afford to do its part to take in some of the world's most vulnerable people fleeing war.

'If Europe fails on the question of refugees ... then it won't be the Europe we wish for,' said Merkel in August.

However, speaking at at an event in Mainz, near Frankfurt on January 11, Merkel admitted the European refugee crisis was 'out of control'.