  We discuss the appearance of modular functions at the one-loop gauge and
gravitational couplings in (0,2) non-decomposable N=1 four dimensional orbifold
compactifications of the heterotic string. We define the limits for the
existence of states causing singularities in the moduli space in the
perturbative regime for a generic vacuum of the heterotic string. The "proof"
provides evidence for the explanation of the stringy Higgs effect.
