German's Social Democrat vice chancellor, Sigmar Gabriel, warned on Friday that a dispute among the conservatives over how to handle record inflows of migrants into the country was jeopardising the government's ability to act.
Merkel and Horst Seehofer, the leader of her Bavarian sister party, have frequently clashed over how Germany should deal with the estimated 800,000 to 1 million it expects this year, many of them from war zones in the Middle East.
Merkel, the leader of the Christian Democrats (CDU), has favoured an open-door policy and says Germany can cope.
Seehofer, head of the Christian Social Union (CSU) in Bavaria, the entry point in Germany for many of the migrants, has said the existence of the conservative bloc was at stake if she did not "correct" her asylum policy.
Gabriel, leader of the Social Democrats, the junior partner in the ruling coalition, said in an interview with Spiegel Online that the conservative parties were acting "irresponsibly" and creating even more uncertainty among the population as concerns mount that Germany cannot deal with the new arrivals.
"Given the big challenge our country is facing due to strong immigration of refugees, the dispute between the CDU and CSU is now threatening the ability of the government to act," he said. He cited no examples of government work being held up.
"The longer the dispute in the conservative bloc lasts, the more people will turn away from politics and the more ground the right-wing radicals will gain," Gabriel, who is also Germany's economy minister, said.
In a development that could help control the flow of refugees into Germany, Thomas Kreuzer, head of the CSU in Bavaria's regional parliament, said Germany and Austria had agreed on a procedure to deal with those new arrivals coming into the southern state.
Under the agreement, 50 refugees per hour could cross into Bavaria at five agreed border crossing points, he said.
German Interior Minister Thomas de Maiziere earlier this week called Austria's recent handling of refugees "out of order" as "refugees, without warning and after dark, were being driven to the German border", he said.
MEETING SATURDAY
The conservatives have declined in opinion polls in recent weeks, with a Forsa poll showing them dipping two points to 36 percent support, their lowest level in three years. Recent surveys have shown the right-wing anti-immigrant Alternative for Germany (AfD) gaining support.
Earlier this week, Bavarian Finance Minister Markus Soeder said the relationship between the CDU and CSU was going through its trickiest patch since 1976, when there was a major fight between former party leaders Helmut Kohl and Franz-Josef Strauss.
Seehofer is due to meet Merkel on Saturday to discuss refugee policy and they will then hold talks with Gabriel.
Thousands of migrants continue to arrive in Bavaria every day, and the CSU called for immediate measures to reduce inflows to Germany, regional newspaper Passauer Neue Presse said, citing an internal list of CSU demands ahead of Saturday's meeting.
In it, the CSU called for illegal immigrants to be turned back at the border and urged the creation of "transit zones" at Germany's borders to filter out migrants who have no chance of gaining asylum, and the securing of the European Union's external borders, the newspaper said.
Kreuzer said limiting immigration was the priority and added that integration would "fail spectacularly if immigration continues at this rate".
Two senior SPD members accused Seehofer on Friday of endangering the ruling coalition and said their party would not agree to "transit zones".
One of them, Thorsten Schaefer-Guembel, criticised the CSU for its "right-wing populist cheap propaganda".
