By Stephen Brown
LEIPZIG, Germany (Reuters) - Germany's Social Democrats (SPD) have buried a taboo from the Cold War on working with the far left to show Chancellor Angela Merkel - and their own supporters - that the party will be no pushover in talks about forming a new coalition government.
The center-left SPD suffered its second-worst election defeat of the post-World War two era in September and is now negotiating its conditions for helping to form a government with the conservatives by Christmas.
SPD chairman Sigmar Gabriel, facing discontent in the ranks at the prospect of being Merkel's junior partners for the second time in a decade, tried to manage expectations while dangling the prospect of a leftist majority at the next election in 2017.
"Yes, with the Left Party too," Gabriel told an SPD congress in Leipzig. "Yes, we are open to such coalitions."
Germany's two biggest parties, Merkel's conservatives and the SPD, have ostracized the radical left for decades, seeing them as heirs to the former East Germany's communist regime and the violent West German radicals of the 1970s and '80s.
But the SPD works with the Left at local and state level. Delegates in Leipzig welcomed the party chairman's announcement that the SPD would open up - if the Left, now the third-biggest party after overtaking the Greens, embraces undogmatic policies on issues such as membership of NATO, which it now opposes.
The SPD, Left and Greens won a slim majority over Merkel's conservatives in the Bundestag lower house but could not use it to oust her since the SPD ruled out a "Red-Red-Green" alliance in the campaign headed by ex-finance minister Peer Steinbrueck.
Now Gabriel needs to convince his party, as he compromises on campaign promises like tax hikes on the rich, that there will one day be an alternative to "grand coalitions" like the Merkel-led 2005-2009 one that cost the SPD millions of votes.
Political scientist Oskar Niedermayer said that with the SPD opening up to the hard left, Merkel's Free Democratic (FDP) partners dropping out of parliament and the Greens no longer considered automatic allies of the SPD, Germany's coalition landscape has changed.
But the SPD's cautious overtures to the Left could also be seen as tactical ploy to make sure the Leipzig party congress did not "turn into a revolt against the 'grand coalition' talks continuing", said Niedermayer.
When the long coalition talks finally produce a blueprint for government, nearly half a million SPD members will have the last say in whether the party signs up to it for the next four years, in a postal vote in late November or early December.
"If we manage to give the coalition deal a clear Social Democrat imprint, I'll have no qualms about asking our 470,000 members to vote for it," said Gabriel, a doughty 54-year-old who assumed full responsibility for September's historic defeat.
The left wing of the party, spearheaded by Ralf Stegner from the northern state of Schleswig-Holstein, has warned the leadership against compromising SPD ideals "in exchange for a few cabinet jobs".
Gabriel himself is a shoo-in for a major ministry and deputy chancellor, though Germany's European partners will be keenest to know whether Merkel manages to keep Wolfgang Schaeuble as finance minister or has to sacrifice him.
The party chairman acknowledged that Merkel won the election partly because she projected more competence on economic policy in the euro zone crisis.
He urged the SPD to learn from her, as well as providing a "new home" for FDP supporters and showing the Mittelstand - the medium-sized companies that are the backbone of Germany's economy - that the SPD does not consider them a "class enemy".
The SPD should profile itself as "social and liberal" for the next election, he said - which might be hard to tally with a future coalition with the anti-capitalist Left Party.
(Editing by Mark Heinrich)