Chancellor urged to sack key aide over Lafontaine

As the German Chancellor, Mr Gerhard Schroder, embarked on a week-long tour of European capitals yesterday, he came under mounting pressure from party colleagues to sack one of his most senior aides.

Left-wingers in the governing Social Democratic Party (SPD) blame the Chancellery Minister, Mr Bodo Hombach, for hostile media briefings that led to the dramatic resignation of the former finance minister, Mr Oskar Lafontaine, last week.

Mr Lafontaine identified poor teamwork in Germany's centreleft government as the reason for his resignation and claimed cabinet colleagues misrepresented his policies in press briefings.

Leading left-wingers yesterday accused Mr Hombach of "overestimating himself" and urged the Chancellor to sack his adviser in the interests of party unity. Mr Hombach insisted he had no intention of resigning and said he had the backing of both the chancellor and the party.

Mr Schroder was in Copenhagen yesterday at the start of a tour of EU capitals. He will meet the Taoiseach, Mr Ahern, in Dublin on Friday.

The Chancellor signalled that, following Mr Lafontaine's departure, the German government is preparing a new, more business-friendly economic policy. "We'll make it clear that we want to create a balanced relationship between promoting business and social justice and that we are able to create it," he said.

But left-wing Social Democrats warned Mr Schroder against abandoning the policies the party campaigned on in last year's federal election. Mr Michael Muller, a deputy parliamentary leader, said abandoning traditional policies could destroy the party.

"A policy along the lines of `business whistles and the SPD follows' would soon finish the party off," he said.

Senior Social Democrats moved to reassure party activists that there would be no abrupt change of policy and that the Chancellor would remain true to the party's core beliefs. Mr Schroder is currently acting chairman of the SPD and he expects to be elected formally to the post at a special party conference on April 12th.

"Gerhard Schroder is a Social Democrat who also stands for social justice," the SPD parliamentary leader, Mr Peter Struck, said yesterday.

Mr Schroder insisted last week that it was now too late to modify the controversial tax reform drawn up by Mr Lafontaine but he promised more tax relief for business soon.

The continuing influence of Mr Hombach, however, suggests that the Chancellor is preparing to move towards so-called Third Way policies similar to those espoused by the British Prime Minister, Mr Tony Blair.

A former finance minister in the state of North Rhine-Westphalia, Mr Hombach has written a number of books calling for a leaner state and a reform of the social welfare system.