Foreign wizards muscle in on Oz: In the Seventies and Eighties Australian tycoons were buying up the world. Now outsiders are taking over their businesses. Today is Australia Day. Will a new vision be revealed? Robert Milliken reports

Paul Keating, the Prime Minister who wants to shed Australia's last links with the monarchy, has chosen today to make a speech on the country's national identity. Apart from taking a public holiday at the beach, most Australians - and their leaders - have traditionally ignored Australia Day, the anniversary of 26 January 1788, when Captain Arthur Phillip raised the British flag in front of the First Fleet's bedraggled cargo of convicts in virgin bush fronting what is now Sydney Harbour, and declared the country British.

With one eye on a coming general election, Mr Keating will seek to turn the occasion this year into a vision of the future rather than a window on the past. His timing could not be better. Australians' sense of their independence and self-reliance has been shaken in the Nineties by the fall of some of the country's biggest business names into foreign hands. The country that sent a parade of entrepreneurs, including Rupert Murdoch and Kerry Packer, overseas in the Seventies and Eighties to buy up newspapers, television companies, cricket teams and breweries now appears to be in the process of being bought up itself.

A Canadian magnate (Conrad Black) and a South African chief executive (Stephen Mulholland) now control the Fairfax newspaper group, owned for almost 150 years by the Fairfax family. A Californian banker was named on Sunday as the new chief executive at Westpac, Australia's oldest and largest bank. Some Australians complained when British Airways last month took a 25 per cent stake in Qantas, the country's international flag carrier. Many more shuddered when the brewers of Castlemaine XXXX fell into New Zealand hands.

Some of the takeovers and restructurings are the inevitable fall-out from the financial binges of the Eighties. As in Britain, the latest questioning of national identity has been accelerated by collapsing trade barriers and the globalisation of corporations and economies. None of the changes has produced as much heat, though, as the three-month takeover battle - about to reach its climax - for Australia's oldest biscuit producer.

Arnotts has been making biscuits in Australia for 127 years. The predator is Campbell Soup, the giant American company. Arnotts is hardly ailing: last week it reported a net profit of Adollars 53m ( pounds 24) for the half-year to December, almost 80 per cent higher than the previous year. Campbell aims to use Arnotts as a springboard into the expanding market for Western foods in Asia, where other multinationals are staking out territory.

With its company emblem of a rosella, a multicoloured Australian parrot, Arnotts is one of the two most recognised brand names in the country, along with Foster's Lager. William Arnott, a young Scottish baker, emigrated to New South Wales in 1850, where he joined the gold rush and opened a shop. Fifteen years later, he moved to Newcastle, north of Sydney, with pounds 12 in his pocket and opened a biscuit-making business. Prudence and thrift have guided the fortunes of the Arnott family and company ever since.

Although Arnotts is the world's seventh-largest biscuit-maker, its operations are still largely confined to Australia. It makes two out of every three biscuits sold in Australia. Australians are the world's third-largest consumers of biscuits per head of population, and almost every Australian child has been brought up on such traditional Arnotts varieties as Milk Arrowroot and Scotch Finger.

The company survived a challenge in the Sixties from Nabisco of the United States, the world's largest biscuit manufacturer. It was a threat closer to home, 20 years later, that triggered the current swoop on the rosella by the American eagle in the form of Campbell.

Alan Bond, the now-bankrupt entrepreneur, was riding high in 1985 when he launched a takeover bid for Arnotts, reportedly backed by Nabisco. In its search for a 'white knight', Arnotts considered United Biscuits of Britain and BSN of France. It rejected both, largely because it feared ending up as a colonial outpost of a European biscuit empire. It turned instead to Campbell, whose biscuit operations represented only a small proportion of its business in America.

The initially benign relationship turned aggressive after the appointment two years ago of Australian-born David Johnson as Campbell's chief executive in the United States. Campbell seized on its Arnotts connection to further its ambitions in Asia.

William Arnott's great-great grandson Sandy Dawson fought a bitter battle to stop Campbell manoeuvring for greater control. He was finally sacked last year as managing director and replaced by a former Campbell man. Campbell, which held 32.9 per cent of Arnotts' shares, launched a formal bid last October to take its holding to 50.1 per cent. An independent report by a Sydney merchant bank said the Campbell offer substantially undervalued Arnotts, and was 'not fair and reasonable'. Campbell has since raised the its offer, which closes on Thursday.

The key to the outcome may lie with the hundred or so descendants of William Arnott who control one-quarter of the shares. In their founder's tradition, the Arnotts are one of Australia's most conservative, low-key families, disdaining the flashiness of the new- money tycoons of the Eighties. The Campbell bid has forced them into the spotlight.

One family member, Alice Oppen, an English teacher at an exclusive Sydney private school, has organised rallies of a group called Stay Australian Owned, whose acronym, SAO, is the name of one of Arnotts' best-selling biscuits. She has called on fellow Arnotts, in the name of national pride and family history, not to sell their shares at any price. 'Arnotts is part of Australia's infrastructure. If we can't control our own food companies, we haven't got much hope as a nation.'

Others are more pragmatic. Jillian Arnott, a Sydney lawyer, says: 'The board has to advise in the interests of shareholders, not in the interests of Australia.'

Mr Keating, one of the most nationalist leaders Australia has produced, has kept very quiet about the steady foreign incursions on the country's icons. His Labor government has actually encouraged higher levels of foreign investment and greater globalisation of its economy. In his Australia Day message, he will stress that the country's economic destiny lies in Asia. In doing so, is he gently suggesting that, like it or not, the icons are being redrawn?

(Photograph omitted)