More Germans coming to the belief that their leader lacks conviction

Gerhard Schroder strode into the boardroom, beamed at the businessmen gathered to discuss a crucial bank merger, and demanded…

Gerhard Schroder strode into the boardroom, beamed at the businessmen gathered to discuss a crucial bank merger, and demanded to know what cigars they had to offer. Once he had selected, clipped and lit the Cuban smoke of his choice, he sat back in his chair and asked his interlocutors what exactly they had come to talk about.

"It was the most incredible, offensive display I have ever seen. He quite clearly hadn't opened a file or glanced at a briefing paper," one of those present recalled this week.

This business leader, a former chairman of one of the world's biggest companies and a lifelong Social Democratic sympathiser, concluded then and there that Mr Schroder was a man without substance or conviction. A growing number of Germans are now coming around to the same view.

As the Chancellor struggles to stamp his authority on an increasingly fractious party and faces humiliation in a succession of state polls, most Germans believe that he is incapable of bringing his rebellious colleagues into line.

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A former left-winger who delighted in embarrassing the Social Democratic hierarchy, Mr Schroder now wants to impose discipline on a party which has never warmed to him.

Hoping to follow in the footsteps of Mr Tony Blair, he is planning a thorough overhaul of party policy to bring it into line with his own "New Centre" thinking.

Unfortunately for the Chancellor, few of his colleagues believe that he has a clear vision of how to modernise the party or the grit to make the tough choices necessary. Some maintain that Mr Schroder has no fixed political principles whatsoever and that he is driven by a simple urge to win and retain power.

The Chancellor's response to his government's current troubles has been to organise a photo-opportunity in Berlin next week, when he will invite 100 Berliners to his luxury villa to eat Bratwurst and bread rolls. Mr Schroder himself will act as waiter, no doubt charming those present and securing light-hearted, sympathetic coverage in the mass-circulation newspapers.

This event will be the latest in a series of stunts he has staged since he returned to work in Berlin last week, starting with a drive through the Brandenburg Gate aboard an open-top bus.

Such performances are unlikely to boost the Social Democrats in six forthcoming state elections and will do nothing to enhance the Chancellor's standing among his colleagues.

Mr Schroder can no longer depend on his favourite lieutenant, Mr Bodo Hombach, who left the government to co-ordinate the reconstruction of Kosovo amid allegations that he acted improperly in a property deal.

Mr Hombach delighted in undermining government ministers on his master's behalf, leaking damaging stories to the press in anonymous briefings. Liaising with Britain's former trade and industry secretary, Mr Peter Mandelson, he was instrumental in forging closer links between the Social Democrats and New Labour.

This dalliance culminated in the publication earlier this year of a joint policy document signed by Mr Schroder and Mr Blair which called on European social democrats to embrace market reforms and abandon many of their traditional policies.

Unfortunately for the Chancellor, his party colleagues show no sign of following him down the path of the New Centre. Left-wingers point out that Mr Schroder won last year's federal election on a manifesto promising better conditions for the old, the sick and the poor.

Far from enhancing the lives of the weakest in society, Mr Schroder's government is planning to make them pay for tax cuts for businesses and their employees.

Since he took office, the Chancellor has abandoned or watered down many of his election promises, notably on nuclear power and a reform of Germany's citizenship laws. His much-trumpeted Alliance for Jobs has yet to yield results and his attempt to cut Germany's contribution to EU funds ended in failure.

Although Mr Schroder's position remains secure for the moment, potential rivals are loitering conspicuously in the wings.

The Defence Minister, Mr Rudolf Scharping, last month turned down the position of NATO's Secretary General, preferring to remain in domestic politics. "I have always said that I have what it takes to be chancellor and I have not changed my mind about that," he said recently.

Meanwhile, Mr Oskar Lafontaine's self-imposed spell of seclusion is about to come to an end with the publication of his tell-all memoirs.

According to one of the former finance minister's friends, he is in no mood to stand by silently while Mr Schroder reshapes the party in his own image.

"Under Lafontaine as chairman, the Social Democrats became stronger than ever before. They occupy all the important positions in the state. Oskar Lafontaine cannot look on without saying a word if all that is thrown away," he said.