By Madeline Chambers
BERLIN (Reuters) - A regional politician known for cracking down on tax dodgers is aiming to become leader of Germany's Social Democrats in a membership vote that began on Tuesday, vowing to renegotiate the coalition deal with Angela Merkel's conservatives if he wins.
Germany's oldest party is split over whether to stay in the fragile coalition and members are desperate for a new leader to revive its fortunes after its worst ever performance in European elections in May forced the previous boss to quit.
The contest pits the front-runner and continuity candidate, Finance Minister and Deputy Chancellor Olaf Scholz, against Norbert Walter-Borjans, a quietly spoken former regional finance minister who wants a "new start" for the coalition.
That means renegotiating the coalition deal with a focus on social justice, a fairer labour market and more investment - if needed with a budget deficit.
If the conservatives refuse, the Social Democrats (SPD) may walk out, which would trigger snap elections or a minority government presiding over Europe's biggest economy.
Some 426,000 SPD members are voting in the 10-day long ballot. The result will be announced on Nov. 30 and ratified by delegates at a party conference a week later.
Many pollsters expect a tight race after Walter-Borjans and his leftist running mate, Saskia Esken, won 21% in the first round compared to 22.7% for the joint ticket of Scholz and little-known Klara Geywitz.
While the party establishment backs Scholz, his opponent has the mighty support of the SPD in Germany's most populous state, North Rhine-Westphalia (NRW), and the leftist Jusos youth wing.
Walter-Borjans, a 67-year-old carpenter's son, earned the nickname "Robin Hood of taxpayers" for cracking down on tax dodgers with secret Swiss bank accounts as NRW finance minister.
He has won over many rank and file members fed up with propping up the government headed up by Merkel, who has depended on the SPD in 10 of her 14 years in power.
Walter-Borjans has criticised the SPD for making "too many lazy compromises" in its alliance with Merkel. "We cannot just go on like this, we need a new start," he said on Monday.
Esken set out what was at stake even more clearly, saying on Monday that if a new coalition deal is not agreed with the conservatives, she would recommend ending the coalition.
Scholz, a former mayor of Hamburg, argues that last week's deal on a basic pension shows the coalition works.
"This is something every Social Democrat can say is a very good solution for our country and we have achieved something to make things better," he said on Monday.
The new leader faces a mammoth task to revive the SPD. In the 2017 election its vote share slumped to its lowest since 1933. The latest INSA poll put the SPD at 15.5%, behind the conservatives and Greens and just ahead of the far-right AfD.
(Reporting by Madeline Chambers; Editing by Mark Heinrich)