  We propose that gaugino condensation in the hidden sector may dynamically
induce intermediate gauge symmetry breaking and specify the compactification
scale. We also show that this scheme makes possible affine level one grand
unified string models with gauge breaking scale $M_{\rm GUT} \sim 10^{16}$ GeV.
$T$-duality plays a crucial role in making this scheme possible, even though it
is spontaneously broken. We also discuss the generation of the large mass
hierarchy between the string scale and the electroweak scale and the solution
of the dilaton runaway problem in this scheme.
