By Erik Kirschbaum
BERLIN, Jan 1 (Reuters) - A German conservative party leader warned against tax cuts to boost flagging economic growth on Thursday after Chancellor Angela Merkel signalled a willingness to drop her previous opposition to any immediate tax relief.
Ole von Beust, Christian Democratic mayor of Hamburg, said it was doubtful tax cuts would spur growth while they would raise debt. He made his warning ahead of a meeting on Monday where coalition leaders will work on a new stimulus package.
"To cut taxes now would inevitably lead to a new debt trap at a point when we cannot even begin to fathom the scope of the tasks facing federal and state governments," von Beust told the Hamburger Abendblatt newspaper to be published on Friday.
Merkel had cautiously hinted at scope for tax relief before the September election for the first time in her New Year's Eve address on Wednesday, edging away from her previous stance that there would be no tax cuts of any kind before September.
She had faced some criticism for rejecting tax cuts from inside her CDU -- but especially from the Bavarian sister party, the Christian Social Union (CSU). The CSU has threatened to block a second stimulus package if no tax cuts were included.
"Wherever it is responsible -- with regards to future generations -- we'll try to relieve all those who pay taxes and other levies," Merkel said in her address on German television.
But she offered no time frame nor any further details for her ideas on tax relief. She had also said last week balancing the federal budget remains a top priority for her government.
Merkel's coalition partners, the Social Democrats (SPD), oppose tax cuts because they fear the relief would not reach 22 million who pay low or no income tax. Economists warn those who benefit from tax cuts will likely save rather than spend them.
Another CDU state leader, Dieter Althaus of Thuringia, proposed in an interview with Stern magazine giving 600 euros to all wage earners -- stimulus worth 16 billion euros.
CDU leaders will meet on Sunday to discuss their position ahead of Monday's coalition talks on the stimulus package, which according to media reports could include 25 billion euros worth of spending for infrastructure and education.
The government passed an initial set of measures in December it said was worth 31 billion euros.
The president of Germany's VDA car association lobby, Matthias Wissmann, told the Saarbruecker Zeitung the government should agree measures to help the car industry as well.
The SPD, which trails Merkel's CDU by about 15 points ahead of the September election, has criticised its coalition partner's inability to unite against the tax cuts and especially the CSU's demands for tax cuts.
SPD campaign manager Kajo Wasserhoevel told the Frankfurter Rundschau newspaper that the CDU had no clear course right now.
"There's a lot of tactic and no clear line," Wasserhoevel told the newspaper's Friday edition.
Germany has slipped into recession and economists have predicted it could be the country's worst post-war downturn. (Writing by Erik Kirschbaum, editing by Mike Peacock)