Merkel's conservative Christian Democrats (CDU) and the center-left Social Democrats have crossed swords in recent weeks on counter-terrorism, family policy, tax reform and calls for a minimum wage. Now the tense calm that had reigned in their nearly 18 months in power is history.

The spat between the long-time rivals came to a head when Volker Kauder, the Christian Democrats' parliamentary group leader and a member of Merkel's inner circle, accused Social Democrats of grandstanding at Germany's expense.

"The SPD is damaging the country," he told news channel N24 after leading Social Democrats (SPD) went on the attack over conservative proposals to slash corporate taxes and eliminate the inheritance tax.

A member of the SPD's board, Andreas Nahles, shot back on RBB radio that it was "unbelievable" that the Christian Democrats would call for the tax cuts in direct violation of the government's original coalition agreement.

Merkel enjoys limelight

During its tenure, the "grand coalition" -- the product of an inconclusive national election -- Merkel has deftly set the agenda and quashed dissent, sending her approval ratings soaring.

At the same time, the German economy -- Europe's largest -- has made a robust recovery, joblessness is falling and the public deficit is shrinking.

Merkel has also basked in the limelight of the dual presidencies of the European Union and the Group of Eight club of wealthy nations that she assumed in January.

Off their game

At the same time, the Social Democrats have struggled to seize on issues that resonate with their rank-and-file members and appeal to centrist voters.

The party has plummeted to just 27 percent backing in opinion polls versus 34 percent for Merkel's conservatives.

"The SPD is now futilely trying to boost its profile on any number of issues," Laurenz Meyer of the CDU's parliamentary group gloated in an interview with the daily Leipziger Volkszeitung. "The poll numbers are apparently taking their toll."

The conservatives have used their advantage to go on the offensive on a range of issues, often catching the Social Democrats off guard.

Guenther Beckstein, the powerful conservative state interior minister in Bavaria, infuriated Social Democrats when he said they would share the blame for a future terrorist attack in Germany for opposing CDU plans to drastically widen security authorities' access to personal data.

The parties have also reached an impasse on the SPD's call for a minimum wage in certain sectors. The CDU argues it would be a job-killer.

And the conservative Family Affairs Minister Ursula von der Leyen, a media-savvy mother of seven, has upstaged the Social Democrats with ambitious plans for expanding state-funded child care and family leave.

Political paralysis

"The SPD is slowly realizing that the CDU/CSU will not grant it any more major successes," said the Berlin daily Tagesspiegel.

Vice Chancellor Franz Müntefering of the Social Democrats told public broadcaster ZDF he was nevertheless confident the coalition would see out its four-year term, to 2009.

"But we have to do better than we have done in recent weeks. That's for sure," he said.

As the Social Democrats cope with sinking poll ratings and the right-wing Christian Union parties dream of a future coalition with a smaller, less troublesome king-maker party, the result has been political paralysis in Berlin.

"The CDU/CSU and the SPD are united by just one thought: when might be the right time to leave the coalition, citing a reason that could be made plausible?" the center-left daily Süddeutsche Zeitung said. "The Hamburg (city-state) elections in February 2008, just after a series of other state elections, are at the center of these considerations."

Despite the friction, few observers thought the government would fall.

"The coalition will not collapse now, but the aversion is growing," the left-leaning daily Frankfurter Rundschau wrote.