By Gernot Heller and Matthias Sobolewski
BERLIN, Dec 1 (Reuters) - The German government may seek to defuse a row over whether to cut taxes by introducing short term spending vouchers to provide a fiscal boost to the country's flagging economy, a senior government official said on Monday.
Chancellor Angela Merkel has been under fire from fellow conservatives, allies in Europe, and leading economists to provide a bigger stimulus for Europe's largest economy, but has said taxes will not be cut in the current parliament.
Though Finance Minister Peer Steinbrueck and Economy Minister Michael Glos have rejected vouchers, a senior official who is also opposed to the idea told Reuters it could prove politically expedient early next year.
"I'm afraid we're going to end up with something like this," said the official, speaking on condition of anonymity.
Introducing spending vouchers would enable Merkel to stick to her commitment not to cut taxes before an election due in September 2009, while giving a shot in the arm to the economy.
Merkel reiterated on Monday she planned no tax cuts before the next parliament, but said she was keeping "all options open" should the need arise to step up the government's response.
Leaders of the ruling coalition are due to meet in January to discuss whether Germany needs to do more.
Franz Muentefering, leader of the Social Democrats -- who rule with Merkel's conservatives -- at the weekend lent qualified support to giving lower paid workers vouchers similar to tax rebate cheques already issued in the United States.
Behind the scenes, the coalition is discussing the merits of one-off vouchers for consumers worth 400 euros ($504.3), 500 euros or 1000 euros, according to sources in the government.
The opposition Free Democrats said last week Germany's Bundesbank was also in favour of the measure.
It is still unclear how the vouchers might be awarded.
However, officials familiar with government discussions say jobless claimants could be supplied with the vouchers via the Federal Labour Office, while tax payers who qualify could be granted a non-recurring tax exemption.
Critics argue the measure would cost billions of euros and that its impact would evaporate within months. They also fear many Germans would simply choose to save the money. (Writing by Nicola Leske, Editing by Andy Bruce)