'You can assume that the decision will be made in January, you can assume it will be made by mid-January,' government spokesman Thomas Steg told a regular press conference.

Ms Angela Merkel's government unveiled measures in October to boost growth but with Germany entering what economists are predicting will be its worst slowdown since 1945 the chancellor has been under pressure from all sides to do more.

The heads of Germany's ruling coalition are to discuss extra measures at a meeting on Jan 5 but Finance Minister Peer Steinbrueck stressed earlier that this get-together would not see any decisions taken.

In an interview with the Passauer Neue Presse regional daily, Steinbrueck also said that slashing taxes and allowing a ballooning budget deficit were not on the cards.

'Those publicly proposing 35 billion euros (S$72 billion) in consumer vouchers are lacking in balance. Those proposing 25 billion euros worth of tax cuts have as little sense of proportion as those pushing for a 50-billion-euro investment programme,' the finance minister said.

He also appeared to be backed up by Merkel, who told the Handelsblatt daily in comments to be published on Tuesday: 'We must not bequeath a crushing debt to future generations.

'We must not abandon the goal of consolidation' of public accounts, she stressed. 'Every billion in new debt will further limit our future room for manoeuvre.' Steinbrueck refused to speculate on the scale of the new measures.

Media reports have said they could be worth from 25 to 40 billion euros.

The initial economic package was worth 31 billion euros.

Mr Steinbrueck said the second package would include steps to help the auto industry and remove hurdles to ensure that infrastructure projects were not held up by red tape.

He also said that cutting people's health insurance contributions would be much more effective in putting cash in consumers' pockets than reducing taxes because half of all households already paid no income tax.

Germany's government has angrily rejected calls from economists, politicians from all parties and even from other countries that it is not doing enough to boost its economy, the world's third biggest.

Mr Steinbrueck went as far as to dub the British government's use of heavy borrowing to boost its economy as 'breathtaking' and 'crass Keynesianism,' referring to 20th century British economist John Maynard Keynes who advocated governments should spend their way out of recession.

'No decisions will be taken on Jan 5. There are currently different talks going on. I am trying to ensure that we do not totally lose sight of the basic tenets of budget consolidation and fairness towards (future) generations, and that we act with the necessary prudence,' Mr Steinbrueck said. -- AFP