German Chancellor Angela Merkel and the premiers of the 16 federal states brought the reform before the German parliament in a joint effort to overhaul the country's complex federal system.

The amendments are deemed crucial in streamlining political decision-making in Germany that has increasingly become a drawn-out affair with legislation being substantially watered down at the end of the process.

But in spite of substantial agreement between federal and state governments, the "mother of all reforms," as one of its authors called it, still has a rocky road ahead of it. Speakers for the opposition in parliament called it a monster. They feel it cannot take care of the task of untangling the web of interlocking powers between federal and state governments.

"The reform was meant to separate powers, but it now doesn't," said Renate Künast, the parliamentary leader of the Greens party. "It was meant to speed up decision-making and tackle the huge challenges facing Germany. On all of this the reform fails. What was supposed to be the masterpiece of the grand coalition government has become a bungled piece of legislation that won't bring Germany forward."

Current system blocks legislation

Currently around 60 percent of German laws have to be approved by both chambers of parliament, the Bundestag and the Bundesrat, which represents the states. This system has led to a blockade of important legislation in the past when the two houses have been controlled by different parties. If ratified, the new bill would substantially reduce the number of laws which the Bundesrat can veto.

In exchange for the concessions by the states, the central government in Berlin has been forced to relinquish powers in areas such as education, the environment, the penal system and the civil service. Opposition parties therefore accused Chancellor Angela Merkel of fostering separatist tendencies among state leaders who are bent on destroying national solidarity.

In times of limited finances, they warned, this would lead to a race for the lowest standards in environmental protection and public administration, and foster growing inequality in education.

Government mulls changes to reform

This fear was even shared by Peter Struck, parliamentary leader of the Social Democrats. Although the SPD ministers in Chancellor Merkel's cabinet are supporting the draft, he openly called for changes.

"Simply because the bill has been brought into parliament, this doesn't mean we adopt it all at once," he said. "There is no doubt that a reform is necessary. But this draft cannot be the last word on it and parliamentary deputies have every right to change it according to their convictions."

But Klaus Wowereit, the Social Democrat mayor of the city-state of Berlin, warned against unraveling the hard-won compromise.

"If all those who have not seen their wishes fulfilled start demanding changes, we'll end up in a difficult situation," he said. "In this case I expect the reform to founder in the end."

But some voices in the Bundesrat said they were worried that the poorer states could suffer from the reforms.

Both houses of parliament must pass the bill with a two-thirds majority before the constitutional amendments can go through. The reform is the first key domestic hurdle for Chancellor Angela Merkel and a major test of the ability of her grand coalition government to sell controversial measures not only to the public at large but also to its own members of parliament.