* Regional SPD leader Kraft to wield influence after vote
* Could play key role in post-election coalition talks
* Hot favourite to lead left into 2017 election
* Human touch and leftist appeal contrast with Merkel
By Noah Barkin and Madeline Chambers
HAMM, Germany, Sept 18 Facing an election defeat on Sunday, Germany's Social Democrats are holding on to their trump card, Hannelore Kraft, a popular former handball player who is seen as the left's answer to Angela Merkel.
Whether the SPD ends up sharing power in a grand coalition under conservative chancellor Merkel or staying in opposition, regional leader Kraft, whose name means "strength" in German, is going to be a dominant force in the next four years.
Dubbed "kingmaker" by German media, the 52-year-old tramdriver's daughter and former business consultant from the Ruhr industrial heartland will play a crucial behind-the-scenes role in any coalition talks with Merkel's conservatives and may determine the fates of fellow SPD leaders after the election.
She is unlikely for now to leave her native power base in North Rhine-Westphalia (NRW), Germany's most populous state. But untainted by infighting and compromises that have hurt the SPD's national leaders, she is ideally positioned to lead the party into the 2017 election - against Merkel or her successor.
"She is the only one anyone is talking about," said Frank Decker, politics professor at Bonn University in the state. "She is popular, trusted and has charisma.
"By the 2017 election there could be a mood for change. Merkel would have been chancellor for 12 years and the SPD may have a good shot with Kraft."
Polls make her one of Germany's most popular politicians, unusual for a figure active mainly at regional level. If she were to lead the Social Democrats, she would follow Merkel in becoming the first woman to lead her party.
Helped by an easygoing charm, Kraft has tasted national politics as one of the Social Democrats' deputy leaders and, as a state premier, she sits in the Bundesrat upper house of parliament, where NRW's size gives her considerable influence.
The Bundesrat has inflicted embarrassing defeats on the chancellor and Kraft can claim credit for some of those - most notably for blocking a deal with Switzerland to clamp down on tax evasion. The deal, which would have granted an amnesty to wealthy tax dodgers, was seen by Kraft and the SPD as too soft.
She also helped get a resolution through the upper house on tighter rules for fracking after visiting Canada to get a first-hand look at the controversial method of shale oil extraction.
Kraft has promised to stay in the state capital Duesseldorf for the time being. She has much to prove to national voters and her adversaries accuse her of running up big debts in NRW.
Some wonder whether she has the ambition to move to Berlin. Others fear she could suffer the same fate as former SPD chairmen Kurt Beck and Matthias Platzeck, popular regional leaders who floundered when elevated to the national stage.
But Kraft seems to be in a different league. Her common touch is something Merkel, who often appears stiff with ordinary people, can only dream of.
Kraft chats happily to voters on the street, relates to their concerns and talks passionately about jobs, pay and childcare problems.
"She is very authentic," said Horst Wilhelm, 61, a retired civil servant at a rally in the Ruhr city of Hamm, where Kraft was drumming up votes for the SPD in Sunday's national election.
"I get the impression she means what she says," said Wilhelm. "Kraft is more natural than Merkel."
Klaus Therwert, a 67-year-old retired furniture salesman, had voted almost exclusively for Merkel's Christian Democrats(CDU) but would switch to the SPD if Kraft ran for chancellor: "I like her personality, as well as her policies," he said.
With an emphasis on fair wages, education and fighting tax evasion, Kraft's political instincts are distinctly to the left.
"I am a child of a workers' family," she told Reuters in nearby Coesfeld, adding that she was drawn to politics after becoming head of a works council and struggling to find a place for her son in a nursery. "I had long been political and the SPD embodied much of what was important to me," she said.
One attribute she shares with Merkel is pragmatism. That has helped her appeal to a broad spectrum in the SPD. The party has been deeply divided since Gerhard Schroeder, another popular state premier and the last Social Democrat to be chancellor, cut back spending on Germany's social welfare system a decade ago.
"I never understood these concrete groupings into right and left within the SPD," Kraft said in the interview, before a visit to a shuttered colliery in Hamm where she pleased a crowd with a speech condemning growing income inequality under Merkel.
Kraft showed her mettle in 2010 when she ignored warnings from allies and ousted the conservative state premier in NRW by forming a minority government, a rarity in Germany.
Despite relying on the goodwill of parties outside her coalition, including the far-left Linke, the gamble paid off. She held on to power for two years and then romped to victory in an early election last year, with the Greens as partner.
In the run-up to this weekend's national vote, Merkel's camp has warned that the SPD could use Kraft's 2010 tactic as a model to try and form a minority government in Berlin if the chancellor falls short of a centre-right majority on Sunday.
Kraft said replicating her minority government approach at a national level would be "very difficult". She does not rule out a grand coalition - though that option goes against the grain for many in the SPD. Having governed with Merkel in her first term, the party had its worst election in decades in 2009.
Polls show Merkel cruising close to 40 percent of the vote, well ahead the SPD on about 25 percent. But her Free Democrat coalition partners risk failing to score the 5 percent needed to win seats. Without them, the chancellor could turn to the SPD.
One thing is certain - the Social Democrats will be able to do little without Kraft's backing.
Her voice would be key in coalition talks, especially if the SPD is emboldened by a better than expected result. It could then insist on key cabinet posts like the finance and foreign ministries, press for a minimum wage and tax hikes on the rich.
Kraft could also play a crucial role in deciding the fate of SPD chairman Sigmar Gabriel, who may come under pressure to step aside if the party scores near its 2009 result of 23 percent.
Some believe Kraft could even take the party chairmanship herself. If she did, the assumption is that she would stay in Duesseldorf, safely distant from the political fray in Berlin.
Carsten Koschmieder, a political analyst at Berlin's Free University, said Kraft will wait for her moment: "When she comes to Berlin," he said, "It will be as chancellor candidate."