Germany's conservative opposition yesterday offered its support for government plans for €15.5 billion in additional income tax cuts next year, but called on Chancellor Mr Gerhard Schröder to explain how the cuts would be financed.

The display of unity by the Christian Democrats (CDU) followed a week of internal disagreement among prominent party figures on the virtues of increasing borrowing to fund the tax cuts.

Yesterday's decision by the CDU appears to clear the way for the tax cuts, although both government and opposition expect tough negotiations on the details, especially in the parliamentary upper house where the conservatives have a majority.

Speaking after a meeting of the CDU's executive, Ms Angela Merkel, party chairwoman, said the CDU was now united in calling on the government to table proposals "that would be a real contribution to economic growth and creating jobs".

The executive decision was an attempt by Ms Merkel to exert her authority over the party and, in particular, over powerful political rivals.

One such rival, Mr Roland Koch, CDU premier of the state of Hesse, said after the executive meeting: "This has brought clarity and now it is down to the government to act."

Mr Koch had previously ruled out supporting the cuts if they meant new borrowing.

Mr Edmund Stoiber, Bavarian premier and former chancellor candidate, who leads the CSU, the CDU's sister party in Bavaria, also called for opposition unity.

Both Mr Koch and Mr Stoiber are seen as rivals to Ms Merkel to become the main opposition chancellor candidate in 2006.

Mr Schröder's decision last week on the tax cuts, which involve bringing forward to next January cuts originally planned for 2005, put the CDU on to the defensive, despite its leverage in the upper house. The party did not want to miss out on the popularity generated by the tax cuts. - (Financial Times Service)