* Senior FDP member Niebel says party 'not in best shape'
* Merkel's coalition partners risk expulsion from Bundestag
* FDP may fail to reach threshhold for federal government
* Support plummeted to 4 pct from 15 pct in 2 years
* Regional poll in Lower Saxony on Jan. 20 a crucial test
By Alexandra Hudson
STUTTGART, Jan 6 Germany's Free Democrats (FDP) struggled to show a united front on Sunday just two weeks before a crucial state election, which could see their leader booted out if they fail to win enough support to gain Lower Saxony assembly seats.
The junior partner in Merkel's centre-right government is also in danger of missing the threshold for representation in the national parliament in September's federal election, which would leave the Chancellor having to form a coalition with either the opposition Social Democrats or the Greens.
A poll released by Emnid on Sunday put the FDP on 4 percent, short of the 5 percent it needs to prevent being thrown out of the Bundestag for the first time since its founding in 1948.
"It tears me apart inside when I see the state of my party. Things cannot continue as they are," senior FDP member and Germany's Development Minister Dirk Niebel told the party's annual "Three Kings" conference in Stuttgart.
"We aren't in the best shape we could be in as a team ... we are not in our best formation," he said, to applause. His party has spent more time in power in post-war Germany than any other.
His comments overshadowed the later keynote speech by party leader Philipp Roesler, who called for unity and insisted the FDP was vital to Germany's success.
Merkel's conservatives retained their comfortable lead at 40 percent in the Emnid poll while support for the main opposition Social Democrats (SPD) dropped by one point to 27 percent after another blunder by its candidate for chancellor, who came under fire for saying German leaders were underpaid.
"Germany needs a liberal force. We are essential for Germany to remain successful," Roesler told the party faithful.
The 39-year-old Roesler has failed to inject any new dynamism since taking over in May 2011, and if the party fails to enter the assembly in his home state of Lower Saxony in the election on Jan. 20, he will face huge pressure to go.
Most FDP supporters want Rainer Bruederle, a 67-year-old party veteran, to lead the party, according to a recent survey.
The FDP won a record 14.6 percent of the vote in the 2009 election but within a year saw its support evaporate with damaging infighting and broken election promises.
An inability to appeal to the centre and the lack of a coherent message are blamed for the loss of votes. Outside the party conference in Stuttgart's theatre, young party members posed with a mocked-up road sign covered in question marks.
The FDP was expelled from six of Germany's 16 regional governments in 2011 and 2012, polling a mere 1.2 percent in the western state of Saarland last May.
It did claw back enough support to return to the assemblies in Germany's most populous state, North Rhine-Westphalia, and in Schleswig-Holstein, last year. But that was largely because of popular local candidates who openly shunned Roesler.
"Niebel threw any talk of party unity into question. I don't know if we can win back enough support with such open conflict," said Karl Siech, a 68-year-old FDP supporter in the audience.
SPD BLUNDERS TOO
But if Merkel's preferred coalition partner is struggling in polls, so is her main opposition, the SPD.
"Why does (the SPD's candidate for chancellor) Peer Steinbrueck do so much wrong?" Germany's top-selling weekly Der Spiegel splashed across its front cover, showing him against a black background.
His campaign got off to a bad start in October and he initially lost poll support with his abrasive style and a row over his high earnings.
Under the headline "The Dilettante", Der Spiegel wrote: "Peer Steinbrueck is straining the nerves of his party. Too often he comes out with phrases that do not please his comrades. The SPD's left-wing faction above all wants to curb him."
Steinbrueck drew rebukes from across the political spectrum last week for saying political leaders were underpaid.
While SPD leader Sigmar Gabriel told weekly the reaction was "silly", given that Gabriel made the same comment a few weeks ago to broad approval, he expressed unease with the debate.
"I don't find anything scandalous about Steinbrueck's description of the facts," he said. "But the discussion should be about the wages and pensions of normal workers in Germany and not about top salaries in politics and business."
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