The President of the European Commission, Romano Prodi, says Oxford is poised to become one of Europe's leading centres for the teaching of management studies.

The Italian statesman addressed academics and business leaders before officially opening Oxford University's new £36m Said Business School yesterday.

About 20 people staged a demonstration in front of the building to protest at the university's links with the school's principal benefactor, Wafic Said, over his alleged involvement in the international arms trade.

But in a briefing with representatives of the world's press, Mr Prodi joked that he had hoped for a bigger demon- stration.

He said: "I was disappointed. I am accustomed to thousands of demonstrators, and none showed up here."

In a lecture to more than 300 guests, Mr Prodi said: "I admire the school's growing reputation as a centre for management studies in Europe. It draws on Oxford's worldwide standing for solid academic achievements and attracts students from all over the world."

Mr Prodi also used the opportunity to call on Britain to forge closer links with Europe. He said: "In a world of globalisation, no country can hope to be a player if it stands alone. This is the case for all European countries.

"Britain's attitude to Europe contrasts with that of many of its EU partners. It is a source of fascination, perplexity and sometimes frustration."

Before opening the building in Park End Street, Mr Prodi was presented with an honorary degree in recognition of his political and academic career.

The Said Business School building has been open to staff and students for six months. The courses taught have already become some of the university's most popular. Mr Prodi's lecture came just two weeks after a visit by the former South African president Nelson Mandela.

Prof Anthony Hopwood, the Peter Moores Dean of the business school, said: "The official opening of the school provides a wonderful opportunity to celebrate not only the striking new building, but also the growing reputation that the school is gaining in the international community.

"We very much welcome the presence of Romano Prodi, as his willingness to open the building is itself a symbol of the international positioning of the business school at Oxford."

The official opening coincided with the announcement that Mr Said has increased his endowment for the business school by £3m.