* Westerwelle quits FDP leadership, stays foreign minister
* Blamed for erosion of junior coalition party's support
* Centre-right government's work to continue -Merkel
* No snap election like in 2005 expected
(Adds reaction from Merkel, senior FDP official)
By Christiaan Hetzner and Stephen Brown
BERLIN, April 3 German Foreign Minister Guido
Westerwelle stepped down as head of the Free Democrats (FDP) on
Sunday after a string of state election failures for the junior
partners in Chancellor Angela Merkel's coalition government.
Westerwelle said he intended to focus on his job as foreign
minister, although it remained uncertain how long he could hold
on to the post as his standing has suffered with both his party
and the wider electorate.
Analysts did not expect the turmoil in the FDP, which has
weighed on the performance of the coalition, to lead to an early
election in the way that Merkel's Social Democrat (SPD)
predecessor Gerhard Schroeder ended up losing power in 2005.
"After 10 years as party chairman, I will not run for the
office again at the coming federal party congress," Westerwelle
told reporters a day before the FDP's executive had been
expected to push him out.
Westerwelle, who is deputy chancellor, is blamed for the
FDP's plunge in support to around 5 percent from a record 14.6
percent in 2009 federal elections when Merkel was re-elected.
Merkel tried to limit the damage by stressing Westerwelle
had resigned only as party leader of her junior partner, known
for its pro-business, laissez-faire focus on tax cuts.
"It is certainly a turning point for the Liberals, but the
coalition's work will continue," she said. "I look forward to
working with him further as foreign minister in the government."
A FAIRLY RESPECTABLE JOB
"It was the last chance for Westerwelle to prove that he
decides when he goes and no one else," said senior FDP official
Wolfgang Kubicki. No one would question his ministerial post
since "he's doing a fairly respectable job in the meantime",
Kubicki told ARD television.
Westerwelle, 49, said stepping down was made easier by the
presence of "a whole number of young personalities ready to rise
up and take over the leadership of the party". This is likely to
occur at a party congress in May.
The new guard includes include Health Minister Philipp
Roesler, 38, who told Bild am Sonntag newspaper the party had to
"restore our credibility".
Vietnamese-born Roesler heads the FDP in the state of Lower
Saxony and is a favourite to replace his erstwhile mentor, along
with deputy party leader Christian Lindner, 32.
Westerwelle has been under enormous pressure for months to
bow out from within his party, especially after a string of
humiliating regional election defeats since 2009.
Polls show he is the most unpopular politician in Germany
even though foreign ministers are usually respected.
As foreign minister, he has been criticised for breaking
ranks with Germany's Western allies by abstaining in a United
Nations vote authorising military action over Libya.
Late last year Westerwelle was embarrassed by Wikileaks'
publication of U.S. diplomatic cables describing him as vain and
arrogant. One his own aides was the source of the leaks.
LOSS OF CREDIBILITY
"The FDP has suffered an unparalleled loss of credibility
since they re-entered the government in 2009 and their misery is
due to one person: Westerwelle," said Manfred Guellner, head of
Forsa polling institute.
"Every post-war foreign minister before him enjoyed public
high standing," Guellner added. "But with Westerwelle people
just say 'he's not up for the job'."
When Schroeder's SPD and their Greens partners lost control
of key states in 2005 in similar fashion to the centre-right's
problems this year, he called a snap federal election, and lost.
But Merkel is not expected to do the same. Her CDU party is
not as unpredictable as the SPD, the situation is not as bleak
in the upper house of parliament as it was for the SPD and
Merkel is not a gifted campaigner as Schroeder was.
With a growing number of regional FDP leaders now in open
rebellion, Westerwelle's resignation from the party job may not
be enough and his government posts could also be in jeopardy if
a meeting of the party executive on Monday turns ugly.
The erosion of support for the FDP has destabilised Merkel's
coalition. Fearing election defeats, the FDP has been highly
sceptical about euro zone financial rescue measures and did a
U-turn on nuclear power after the Japanese disaster.
But all that did not help. Merkel's CDU lost control of the
conservative state of Baden-Wuerttemberg last week for the first
time in 58 years, largely because the FDP was so weak.
The FDP's shakeup could also cost Economy Minister Rainer
Bruederle, 65, his job. Roesler is reportedly eager to become
economy minister with Bahr, now deputy health minister, likely
to be the next health minister.
(Additional reporting by Erik Kirschbaum and Thorsten Severin;
writing by Stephen Brown; editing by David Stamp)