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* Greens hold exploratory talks with conservatives on Thursday
* Elect new leader on Tuesday, could set tone for talks
* Greens suffering identity crisis as come of age
By Sarah Marsh
BERLIN, Oct 6 (Reuters) - Germany's Greens will elect a new, more centrist parliamentary leader and hold talks with Angela Merkel's conservatives this week to explore prospects for what would be a landmark coalition with their former political arch enemies.
"The chances of a coalition with the Greens have risen in recent days from 'theoretical' to 'conceivable'," conservative Environment Minister Peter Altmeier told Der Spiegel magazine over the weekend.
Such a coalition was indeed long inconceivable for the Greens, who entered parliament in the 1980s with flower pots and jeans pursuing an anti-nuclear, left-wing agenda. SFor their part, Merkel's Christian Democratic Union (CDU) had once portrayed the Greens as dangerous radicals.
Yet deep-rooted differences between the two camps have shrunk in recent years as the Greens sought to appeal more to centrist voters and Merkel instigated an ambitious "green revolution" away from nuclear and fossil fuels to renewables.
After the chancellor's outgoing partner the Free Democrats (FDP) were ejected from parliament in September's federal election, she now needs either the centre-left Social Democrat party (SPD) or the Greens as a new coalition ally.
"We do not have more differences with the Greens than with the SPD," Armin Laschet, CDU deputy leader and proponent of its progressive wing, told Focus magazine.
The conservative faction, especially within the CDU's Bavarian CSU sister party, is less keen on working with the Greens who campaigned on tax hikes for the wealthy.
Another "grand coalition" with the SPD remains more likely, not least for a Chancellor ill inclined to political adventure, at a time of some upheaval among the Greens. A stronger party, the SPD would also help curtail the influence of the CSU.
Yet the SPD is is no hurry to back Merkel after its support was devastated during the last 2005-09 grand coalition. It would likely exact a high price for joining government and labouring under the shadow of a popular chancellor.
Both the Greens and the SPD are concerned Merkel's CDU/CSU is trying to play the potential partners off against each other to get a better coalition deal.
"The parties must not do tactical maneouvring to wilfully delay the negotiations," SPD leader Sigmar Gabriel told the Sueddeutsche Zeitung.
The CSU/CDU and the Greens have nonetheless said they will take the exploratory talks on Thursday very seriously.
Laschet said the issue of nuclear energy that long divided the two parties disappeared when Merkel decided to shut down the nuclear industry in reaction to the Fukushima disaster in Japan. The Greens, who ruled from 1998 to 2005 with the SPD, also voted for all of Merkel's key measures to tame the euro crisis.
Some Greens, in particular from the leftist faction, are sceptical about teaming up with the CDU due to other differences over how fast Europe's largest economy should go green and their more liberal views on family, immigration and gender.
They worry about further damaging popularity after the party lost considerable ground in the September election, finishing fourth on 8.4 percent behind the far-left Left party.
Other Greens from the pragmatist faction who warned against its lurch to the left, including the party's first state premier Winfried Kretschmann, are open to a coalition with Merkel and want to return to the corridors of power to influence policy.
"The energy revolution will have gone its course in four years time and perhaps not as we wanted it," said Kerstin Andreae, Greens spokeswoman for business affairs standing for parliamentary leader in a party vote on Tuesday.
At a state level, the Greens have already worked with the conservatives, ruling Hamburg with the CDU for three years until 2011 in a coalition that earned them national respectability.
The resignation of the party's veteran leaders in the post-election shake-up may have made it more palatable to the conservatives, who remember them from their firebrand days.
It could also lessen the taint of recent revelations of the party's tolerance of paedophilia in the "free love" years after its creation in 1980 that weighed on its election result.
In recent years, Greens parties across Europe have been suffering an identity crisis since trading in their woolly sweaters and sandals for suits upon joining government and having to compromise on their ideals.
Andreae, 44, will be pitted on Tuesday against Katrin Goering-Eckardt, 47, who co-led the Greens' election campaign. The new leadership faces the task of redefining the party.
Andreae has said the party must return its focus to the environment and cooperate with business on the energy switch. Her nomination would signal a return to the centre.
Goering-Eckardt would find it more difficult to back down from leftist campaign pledges; yet is still seen as a snug fit for the conservatives due to her links to the Lutheran church and self-proclaimed conservative values. (Additional Reporting by Hans-Edzard Busemann; editing by Ralph Boulton)