LONDON: European private equity firms are trying to rescue their reputation.

Under attack by politicians who called them "asset strippers" and "locusts" and by trade union leaders accusing them of cutting too many jobs, private equity firms are offering to hold meetings with their fiercest critics and have contributed £5 million, or $9.8 million, to set up a foundation to share part of their wealth.

In the latest effort, a group of European buyout firms said Thursday that David Walker, a former chairman of Morgan Stanley in Europe, would lead a task force to draw up a code of conduct for disclosure. The unstated goal, analysts say, is to prove wrong those who say there is too much privacy in the private equity world.

The stakes for the industry are rising, particularly with rumors circling about bidding for the British retailer J Sainsbury. There is also said to be interest in some Airbus factories, and firms are looking at Continental, the tire maker based in Germany, and Vodafone Group, the telecommunications company.

Some analysts and bankers add that support from trade unions and politicians is vital for the private equity industry to continue to raise record levels of money and finance takeovers, which totaled $234 billion in Europe last year.

"Ignoring the debate would make it seem private equity firms are insensitive," said Scott Moeller, a professor at Cass Business School in London.

Paul Kenny, who leads the British trade union GMB, put the industry under new pressure last month, demanding that the firms be more open and calling on Gordon Brown, chancellor of the Exchequer, to clamp down on a tax benefit GMB says is available to buyout firms.

The union represents about a thousand people who were laid off at the Automobile Association, the roadside car-repair company in Britain, after the private equity firm Permira bought it. In Britain, about three million people, or 19 percent of private sector employees, are working for companies controlled by buyout firms.

The calls for stricter tax laws have worried some private equity executives.

"The outcome that would concern the industry is if the playing rules change to the extent that it would reduce our ability to produce returns," said Colin Taylor, head of DLJ Merchant Banking Partners in Europe.

With France holding presidential elections in April and Prime Minister Tony Blair of Britain preparing to step down before September, some private equity executives have become alarmed that they could become scapegoats in a political debate in Europe.

Private equity firms turned to Walker, who has held senior posts at the Bank of England, the British Treasury and Lloyds Bank, now part of Lloyds TSB Group.

About 25 private equity firms have signed on to the disclosure initiative, including Blackstone Group, Kohlberg Kravis Roberts and CVC Capital Partners. The three firms said last month that they were considering a bid for J Sainsbury. With a market value of £9 billion, J Sainsbury would be the biggest leveraged buyout in Europe and the first takeover of a company in the FTSE 100 index.

Damon Buffini, head of Permira, and others worry that the private equity industry's success has made it a target, and they acknowledge the need for outreach. "We recognize that the industry's success has led to growing and legitimate interest in its activities," said Rod Selkirk, chairman of the British Venture Capital Association.

Analysts have criticized buyout firms for cutting too many costs and laying off too many employees at companies they own to make the books look good ahead of an initial public offering.

Some point to the example of Debenhams, the department store operator. CVC led a group of private equity firms that bought Debenhams for £1.7 billion in 2003. They delisted the shares, added debt, sold stores, cut costs and jobs and then went public last May, making 3.5 times their investment. For those who bought Debenhams shares, the investment has been less lucrative; shares have dropped 14 percent since the May initial public offering.

Private equity firms argue that they create value. According to their industry association, the number of employees at British companies backed by private equity firms has risen about 9 percent a year in each of the last five years, compared with an average 1 percent increase at publicly traded companies that are part of the FTSE 100 stock index