To explain the observed multiwavelength emission from the cataclysmic varia
ble star AE Aquarii, we propose a model based upon the assumption that the
compact component of this binary consists of a white dwarf with a surface f
ield strength of 1 MG, rotating through a clumpy ring near the circularizat
ion radius. We argue that MHD instabilities like the Kelvin-Helmholtz insta
bilities will result in the white dwarf field mixing with the gas in this r
egion and becoming highly sheared. The Poynting flux pumped into the region
, and hence angular momentum transferred in the process, is enough to accel
erate material centrifugally from the system. We also show that magnetic re
connection in this region will result in runaway electron acceleration to e
nergies of 300 MeV or more, which will radiate through the synchrotron proc
ess up to frequencies of the order of nu similar to 10(15) Hz. We show that
, because the radiation is emitted in a gaseous medium, the spectrum will b
e suppressed below the so-called Razin-Tsytovich frequency, which is nu(R)s
imilar to 2000 GHz, which agrees with the observations. Magnetic shear in t
he ejection region will also induce field-aligned currents in the magnetosp
here. Huge potential differences (double layers) can be generated in the ci
rcuit where the gas density becomes very low. This will occur close to the
white dwarf. In this region potentials of the order of Phi(parallel to)=300
TV (TV = teravolt) can be generated. Synchrotron losses on electrons will
restrict them to energies of the order of E less than or equal to 50 keV. A
s protons and ions are not affected by synchrotron losses, energies in exce
ss of 1 TeV are possible. Very high-energy (VHE) gamma-ray emission can be
produced if these proton and ion beams collide with the clumpy gas in, or o
utside, the ejection zone. We show that pulsed VHE gamma-ray emission is po
ssible, if the gas particle density of the target matter N-g> 10(13) cm(-3)
, which is compatible with the typical gas particle densities N(g)similar t
o 10(16) cm(-3) of the blobs inside the clumpy accretion stream from the se
condary star. We show that the VHE gamma-ray bursts that were reported by t
wo groups can be explained in terms of an exploding double layer, which wil
l result in a cataclysmic burst of VHE protons and ions over short time-sca
les. The total power released in the process can be P(gamma,b)similar to 10
(34) erg s(-1), which is equal to the spin-down power of the white dwarf, a
nd is enough to explain the reported VHE gamma-ray bursts. This implies tha
t the whole reservoir of spin-down power has gone into the production of VH
E particles and gamma-ray emission.