Yousif Emad had learnt a little Swedish in the past eight months —- enough to know that the four-page official letter meant the end of his dreams.

The 46-year-old Christian, who fled Baghdad after repeated threats to force him to convert to Islam, yesterday became one of the growing number of Iraqis to be refused asylum in Sweden, which until recently was the most welcoming European country for refugees.

He thought it would be a formality to join the 6,000-strong Iraqi community in Södertälje, a small town near Stockholm, which is known locally as Little Iraq.

Fellow exiles fish in the ornamental lake for their dinner in the town, which has taken more of his countrymen than Britain or the United States.

“I sold my house and gave $17,000 (£8,523) to a smuggler to get to Sweden because I heard they wanted immigrants,” said Mr Emad after breaking the news of his rejection to his wife and three children in Syria. “If they send me back to Baghdad I will be killed.”

Sweden granted full refugee status to 24,799 Iraqis from 2003-07 compared with 260 by Britain. Another 2,680 were given humanitarian or discretionary leave to remain in the UK.

Angela Merkel, the German Chancellor, wants the EU to do more to help the Iraqi Christians, many of whom are among the two million refugees in Syria and Jordan.

Yesterday her Interior Minister outlined plans to resettle more Iraqis in Germany.

But as Sweden —- in particular Södertälje —- has learnt, the region is suffering from compassion fatigue.

Anders Lago, the Mayor of the town, went to Washington last week to tell a congressional committee that his schools and apartment buildings could no longer cope.

“It was fantastic as a mayor of a small town in Sweden coming to the big USA to give a speech in Congress,” said Mr Lago, 51.

“I told them that it was not us who started the war but today we are taking a great responsibility for Iraqi refugees. Barack Obama told me he was ashamed that the US did not take more care for refugees.

“I asked if there was some way the US could help Södertälje - but the war has cost the people in the US a lot so I do not think they will be sending any money here for taking care of the refugee problem.”

Mr Lago's reward came when the US Ambassador to Sweden visited his town of 80,000 people yesterday, where the college has built four classrooms to give Swedish lessons.

Mr Lago is also concerned by “white flight” as local people start to move away from Iraqi districts.

At Helenelunds school on a neat housing estate, six more Iraqi children turned up this week.

Karin Ålberg, the head teacher, said: “When I have visitors I have to explain why there are very few blonds in our school. But I think it is really good for us because the children from Iraq want to learn more than any other children and their motivation is infectious.”

Meena Qudsi, 12, who wants to be a doctor, said: “Baghdad is beautiful but here is safe. My family used to be in Baghdad but now we are separated.”

The generous welfare system in Sweden - with handouts of 6,000 kronor (£508) a month to those granted asylum as well as work experience and 550 hours of free Swedish lessons —- attracted 36,200 asylum-seekers last year.

Of the 222,900 asylum claims to the EU, one in six was to Sweden.

Because of the influx, migration courts were introduced, which decided last year that Iraq was no longer a war zone and ended automatic asylum. Each applicant must now prove that they are in grave personal danger.

Sweden also signed a return agreement with Iraq in February and has begun sending failed asylum-seekers back in greater numbers to deter economic migrants.

Tobias Billström, the Migration Minister, said: “The conclusion by the Swedish Government is that we can help some people but we cannot help everybody who is in trouble and so there has to be a more evenly shared responsibility among the countries of the EU and the US.”

Sweden is so upset by other EU countries that it has vowed to push for a fair distribution of asylum-seekers.

“We have reached the conclusion that there should be a common European asylum system and we will make this a priority during our presidency of the EU in 2009,” Mr Billström said.

“We will also call for the European Court of Justice to have the final word so that the European Commission can say that a country is falling behind when it comes to asylum. Every country in the EU has to look into themselves and consider what their obligations are in this situation,” he added.

Mr Emad will appeal against his asylum rejection but feels his case is hopeless. “We were threatened but how can I show it? We had a letter telling us to leave but my brother was so angry he tore it up,” he said.

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