A jump in popularity for the party of Chancellor Gerhard Schröder could rob his conservative opponents of what barely a month ago looked like an assured victory at next week's German election.

An opinion survey published yesterday by the Forsa group showed for the first time since the early election was announced in May the Christian Democratic Union and its ally the Free Democratic Party failing to win a majority on September 18.

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The Forsa poll, the first to be conducted since last Sunday's Merkel-Schröder television debate, confirmed perceptions that the chancellor won the encounter.

The SPD gained three percentage points in a week to 34 per cent. The CDU was off one point to 42 per cent.

"What we see is Schröder reclaiming disaffected SPD supporters from the pool of the undecided," Manfred Güllner, head of Forsa, said. "It is about personalities, not content."

The poll gave the CDU and FDP a combined vote of 48 per cent, short of the 48.5 per cent required for a parliamentary majority. The SPD, the Greens, and the neo-Communist Left party together totalled 49 percent.

Since SPD and Greens say they would not govern with the Left party, such an outcome would mean neither centre-right nor centre-left would be able to form a government on their own.

In an interview with the Financial Times, Mr Fischer warned that Ms Merkel's plans to cut income tax levels and radically restructure the health insurance system would lead to a sharp fall in state revenues.

"This will mean she will have to take a chainsaw to our social security system", cutting unemployment and other welfare benefits and hitting poorest people the hardest.

"If she were honest, Ms Merkel would admit that she thinks the welfare state is too expensive and outdated. I have a completely different view. The social cohesion of a society is absolutely essential," he said.

Speaking in parliament yesterday, Mr Schröder offer-ed a robust defence of the status quo, saying the government's tough economic reforms of the past three years were beginning to work and attacking the CDU's proposed changes as destabilising and dangerous for the country.

The FT underlines that neither Fischer not Schroeder care for a grand coalition and that they have stepped up their attacks on the CDU in recent days, on topics including Turkey and energy policy:

"To argue (as the CDU does) that 'we want to debate European borders and Turkey does not belong' is blind, short-sighted and dangerous," [Fischer] said.

He attacked Ms Merkel and her foreign affairs team as being "a bunch of amateurs and foreign policy dilettantes"

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Addressing the issue of the recent rise in oil prices, Mr Schröder attacked Ms Merkel's suggestion that nuclear power plants earmarked for decommissioning should be allowed to operate longer. Such a measure, he said, would only boost the profits of energy companies without capping energy prices.

The government, by contrast, would keep lobbying for more price transparency on international markets aimed at curbing speculation, promoting the use of renewable energy, and encouraging a more efficient use of energy by companies and households, he said.

As you know, I am personally favorable to nuclear energy and think that Germany is making a mistake to phase it out, but the overall energy policy of the SPD/Greens is much sounder than that of the CDU. I also fully support Fischer's position on Turkey, as well as his robust defense of the German safety net.

But the more interesting question, I think, is whether the SPD will agree to work with the Left Partei or not. Both Schroeder and Fischer have had even harsher words for Lafontaine and Gysi than for Merkel, but it seems to have been toned down recently (or have I missed it?). A rainbow coalition like we had in France in 1997-2002 is an intriguing prospect. I am not sure I am too keen on the programme of the LP, but a lefty government would be healthier for democracy than a grand coalition and would also sign a nice political and ideological signal from within Europe.