Plans to build a center of remembrance in Berlin for Germans who were expelled from countries including Poland after the war in reprisal for Nazi aggression are threatening to create new tensions.

Merkel, a conservative, has thrown her support behind the project.

On Wednesday, in her first speech to parliament since becoming chancellor, she said she wanted to make a "visible sign in Berlin to commemorate the injustice" suffered by Germans driven out of Poland.

Both outgoing President Aleksander Kwasniewski and his successor Lech Kaczynski have warned the project could be divisive.

Rewriting history?

When Merkel visited Poland in August, before she became chancellor, Kwasniewski warned that such a center "would be perceived in countries such as the Czech Republic, Poland and others which were victims of Nazism as an attempt to rewrite history. We cannot accept it."

Kaczynski made headlines for using anti-German rhetoric during his election campaign, saying it was unacceptable "that Germans are trying to portray themselves as victims of the war."

But since his election, Kaczynski has insisted that he wants close partnership with Poland's neighbour to the west.

And Polish Prime Minister Kazimierz Marcinkiewicz, who is settling into office at the head of a minority government following elections in September, has said he is looking forward to opening a "very good" chapter of relations with Germany.

Wary of Schröder-Putin friendship

Analysts say Poland is indeed likely to be receptive to the new German leader, because it viewed Schröder's close friendship with Russian President Vladimir Putin with great suspicion.

Poland was furious at the signing in September of a German-Russian deal to build a gas pipeline which will not pass over Polish territory, depriving it of lucrative transit fees.

And Merkel has said that the European Union must listen more closely to its newer members, such as Poland.

Ulrike Guerot, of the Berlin-based German Marshall Fund, told AFP that Germany has made a concerted effort since the war to improve ties with its neighbor.

"But for that to succeed, there must be a less intimate relationship between Germany and Russia and the wishes of the Baltic countries must be taken into consideration."

Warsaw wants backing on EU Budget

Poland is counting on Germany to back its insistence that the EU long-term budget should not be cut at the expense of new members, Prime Minister Marcinkiewicz said Thursday.

"I hope that Germany will back our position and that we will adopt a common stance" on the EU budget for 2007-2013, he said.

"I hope that Germany will not back the idea of developing the EU at the cost of a reduction in funds, and especially not structural funds for new members," he told a press conference during a visit to the southern province of Silesia.

Poland and the other nine new members of the EU are wary of a proposal by current EU president Britain that newcomers to the bloc accept less in the way of development funds from Brussels in order for EU spending plans for 2007-2013 to be agreed at an EU summit in two weeks' time.

Particularly irksome to the new member states is the fact that the British proposal indulges France's refusal to reform the Common Agricultural Policy (CAP) and Britain's equally stubborn refusal to give up its EU budget rebate unless the CAP is reformed.