Former German finance minister Oskar Lafontaine threatened on Sunday to help form a breakaway left-wing party if Chancellor Gerhard Schroeder persists with benefit cuts that are sparking protests around the country.
Lafontaine, estranged from many of Schroeder's centre-left Social Democrats since he quit as party leader and finance minister in 1999, said Schroeder had discredited himself with a "dismantling" of the welfare state that must be reversed.
"If he had any decency he would resign given his poll ratings. Thousands of Social Democratic local and regional politicians have lost their mandates because of it," Lafontaine told Der Spiegel magazine.
"If Schroeder continues his failed policy up to the next federal election, there will be a new left-wing group aimed at reversing the social dismantling. I will then support it."
Lafontaine's comments mark a bid to establish himself as champion of the party's disenchanted left wing, but he is still viewed with suspicion. His warning drew withering fire from SPD leaders alarmed at growing resistance to the reforms.
"Anyone who puts faith in a candidate so unstable, vain and lacking in humility will see what they get. He wouldn't be a suitable figurehead for any powerful new party," said Ludwig Stiegler, an outspoken leftwinger on the SPD's board.
Lafontaine offered support to the group formed last month by SPD rebels and trade unionists called "Election Alternative for Labour and Social Justice". The group has said it will decide this autumn whether to form a breakaway party.
Such a party would seriously dent the SPD's chances in what promises to be an extremely tough 2006 general election, and the SPD leadership has expelled several of the initiators.
Lafontaine has been isolated in the SPD ever since he left in frustration at Schroeder's lack of support for his plan to boost the economy with Keynesian-style stimulus packages.
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