See the answer to this question would seem to be pretty simple if you can understand one basic thing :
inner class's object cannot exist without an instance of the outer class (except for static inner classes which aren't inner classes anyways).
In this case, since inner class has got a reference which is alive, it also means that the instance of outer class is stored safely in inner (we might say as such) because the inner class may need to access the instance members of the outer class & for that it should have a reference to the outer class's object.
Now since the inner class IS referring to the outer class implicitly, it means that there is a reference for the outer class (which we cannot access by the way) & hence no question of the outer class's object being garbage collected.
Note "rami reddy marri" : the statement InnerClass innerClass = outerClass.new InnerClass(); is invalid.
Please change it to : OuterClass.InnerClass innerClass = outerClass.new InnerClass(); [ March 23, 2007: Message edited by: Sourin K. Sen ]