 In one treatment arm, therapy is based on insulin glargine sc o.d., while in the other treatment arm, therapy is based on oral metformin, up to 2000 mg daily. Both treatment arms will be titrated to the target of fasting glucose 110 mgdl during the first 12 weeks. The patients in the insulin treatment arm will be instructed in the skills of self-medication by the departmental diabetic teaching programme prior to starting study medication and are encouraged to keep records of any episode of hypoglycemia throughout the study.Outpatients visits for metabolic control and ultrasound assessment are at weeks 4, 12 and 24 after baseline and are associated with life style instructions for all patients. 