* Call follows series of insults between coalition partners
* Economists worry about long-term prospects of government
By Madeline Chambers
BERLIN, June 11 (Reuters) - German Chancellor Angela Merkel ordered the parties in her centre-right coalition on Friday to stop squabbling over government policies and trading insults with each other, saying it undermined voters' confidence.
In the last couple of weeks, sharp differences within Merkel's coalition of conservatives and the pro-business Free Democrats (FDP) have been exposed and politicians from the three parties have hurled insults at each other.
A government spokesman was forced to deny Merkel's chief of staff Ronald Pofalla had described Defence Minister Karl-Theodor zu Guttenberg as Rumpelstiltskin, a fairy tale dwarf who spins gold but throws a tantrum when he loses a wager.
An FDP lawmaker this week accused Bavaria's conservative Christian Social Union (CSU) of acting like a destructive "wild sow" for scuppering his party's health reform plans and a senior CSU politician retaliated, calling the FDP a "bunch of clowns".
In an uncharacteristically direct appeal, Merkel urged her colleagues to restrain themselves.
"People who talk about each other like this must not be surprised if respect is lost for politics. I am not prepared to accept that," she told the Frankfurter Allgemeine Zeitung daily.
The infighting has caused some experts to fret about the long-term prospects of Merkel's government.
"The current level of conflict between the conservatives and FDP certainly goes beyond the normal and some commentators have started to question the stability of the government," said Goldman Sachs economist Dirk Schumacher in a research note.
Discord over possible German aid to carmaker Opel is the latest flashpoint. Just hours after FDP Economy Minster Rainer Bruederle ruled out state aid for the General Motors' unit, Merkel appeared to undermine him by saying the last word had not been said on the matter [ID:nLDE6592HJ].
She has since failed to spell out new ideas, merely making vague proposals such as using research and development funds.
Merkel is under pressure to seize the political initiative and boost her party's support, languishing at four-year lows.
An Infratest dimap poll showed the conservative camp down 1 point at 31 percent on Friday. The FDP were down 2 points at 6 percent, less than half their score in September's federal election.
In a bid to revive her fortunes and quash criticism of her leadership during the euro zone debt crisis, Merkel this week unveiled Germany's biggest austerity drive since World War Two.
But even that has drawn fire from her allies. Some conservatives said it lacked ambition in terms of cuts while others argued she should have raised the top income tax level.
Merkel also faces an unexpected battle to ensure her candidate, conservative Christian Wulff, is elected president on June 30 given wide support in the German media for opposition candidate, Joachim Gauck [ID:nLDE6580OI].
"A failure of chancellor Merkel's candidate Wulff to get a majority could easily be the beginning of the end of the coalition," said Schumacher.