By Madeline Chambers and Sabine Siebold
BERLIN (Reuters) - Bavarian conservatives on Thursday rejected a compromise on migrant policy put forward by German Chancellor Angela Merkel to avert a crisis in her loveless coalition just three months after it took office.
At stake are Merkel's authority as well as the future of her alliance with the Bavarian Christian Social Union (CSU) and Social Democrats at a time when European divisions over migrants are once more coming to a head.
Merkel is at odds with Interior Minister Horst Seehofer of the CSU over his "Masterplan for Migration", in which he wants to show voters a tough line before a Bavarian regional election in October.
In particular, Merkel objects to a plan to allow migrants drawn by Germany's prosperity and stability to be rejected at the border if they have already registered in other European Union states to the south.
Merkel said on Thursday that it was crucial to reduce illegal migration, but added:
"I personally think illegal migration is one of the big challenges for the European Union, so I don't believe we should act unilaterally, we should not act in an uncoordinated way and we should not act at the expense of third parties."
At a four-hour meeting, lawmakers from the CSU backed Seehofer and said he might even defy Merkel by going ahead with his plan next week without her agreement.
RIFT IN CONSERVATIVE BLOC
Such a challenge could force her to fire Seehofer, or lead her Christian Democrats (CDU) to split up the parliamentary bloc in which they have cooperated with the CSU since 1949.
The CDU and the Social Democrats (SPD) alone lack a majority in parliament.
"It is serious, very serious," said CSU parliamentary group leader Alexander Dobrindt.
Seehofer's plan would represent a reversal of Merkel's open-door policy, which has already been scaled back since Germany let in around a million migrants in 2015, mostly fleeing war in the Middle East. She argues that it could prompt other countries to follow suit, and that an EU-wide solution is needed.
At the meeting, CSU lawmakers said they could not wait that long. The CSU will decide on further steps on Monday.
"Asylum tourism must end. Germany cannot wait endlessly for Europe, but must act independently," tweeted Bavaria's hardline premier Markus Soeder.
He told Bild newspaper: "The fate of democracy in Germany depends on whether politicians and the government are able to deal with citizens' serious concerns."
In a highly unusual move, a session of the lower house, the Bundestag, was interrupted to allow the CDU and the CSU to meet separately on the issue.
Merkel has proposed that asylum seekers already rejected by Germany could be turned back at the border.
She said it was very unlikely that all the steps for a joint EU asylum and migration policy would be adopted at an EU summit on June 28-29, but that bilateral agreements with EU states could play an important role in tackling illegal migration.
SURGING FAR RIGHT
Merkel's refugee policy is widely blamed for a surge in support for the far-right Alternative for Germany (AfD), which became the main opposition party after September's election.
An ARD poll on Thursday found that 62 percent of Germans believe refugees without papers should not be allowed in. It also found that only 37 percent were satisfied with the work of Merkel's government so far.
Merkel can draw some comfort from the positive reception her compromise got among CDU lawmakers, many of whom had this week voiced at least some support for Seehofer's plan.
"If Angela Merkel pushes for a European solution, then she has my support," the CDU premier of North Rhine-Westphalia state told German television, echoing other senior CDU voices.
Party sources said a majority of CDU lawmakers backed her, but German media said Health Minister Jens Spahn, a longtime critic, did not fully support her idea.
Merkel now faces intense pressure to get deals with EU partners by the summit. A CDU source said after the meeting that the chancellor had told lawmakers she was aware that two weeks was an ambitious timetable.
In a rare convergence of views, the SPD and AfD both dismissed the row as an election manoeuvre. "Staging such a drama to serve regional elections is not appropriate," said SPD leader Andrea Nahles.
(Additional reporting by Andreas Rinke, Tom Koerkemeier, Michelle Martin; Writing by Madeline Chambers; Editing by Kevin Liffey)