* German Finmin wants mediation to save deal
* Opposition parties determined to oppose
BERLIN Nov 28 The German government has attempted to salvage a tax deal with Switzerland worth millions of euros which was blocked in a political battle over how much tax the wealthy pay.
The government on Wednesday referred the deal to a special mediation committee after it was thrown out by opposition-run federal states in the upper house Bundesrat last week.
Championed by Finance Minister Wolfgang Schaeuble, the agreement would have allowed Germany to tax assets stashed away by its citizens in Swiss bank accounts.
The opposition Social Democrats (SPD) and Greens, keen to make taxation of the rich an issue in campaigning for next September's federal election, argued that the legislation would have let off tax evaders too easily.
"In the mediation committee good sense and the strong reasons for this deal should win out," government spokesman Steffen Seibert told reporters at a regular press conference on Wednesday after the weekly cabinet meeting.
"The government is convinced this deal is a good thing, that we cannot achieve anything better and that it offers good solutions for the future and for the past. We are prepared to discuss things and we trust there is the same willingness on the other side."
The deal is due to take effect from the start of 2013. The mediation committee includes members of both German houses of parliament.
"It is in Germany's interests for this deal to go through," Seibert added.
Chancellor Angela Merkel's centre-right government struck the pact with Switzerland in April but without a majority in the Bundesrat, where Germany's 16 states are represented, it needed opposition support.
The deal would have required Swiss banks to levy a punitive charge on an estimated 150 billion Swiss francs ($160 billion) in undeclared funds squirreled away by Germans in Swiss accounts. Future holdings by German citizens would be treated on a par with those held in Germany.
The proceeds would be passed on to Germany, including its 16 Laender, or states, without the identities of the account holders being revealed.
The chances for mediation to succeed appear slim, however, with the SPD dead-set on torpedoing the deal. In addition, as the legislation is already fully ratified in Switzerland, there is little room for changes. (Reporting by Alexandra Hudson, editing by Gareth Jones and)