FRANKFURT (AFP) - German rail travel was paralysed on Wednesday by an open-ended strike, the ninth stoppage in less than a year, as the government prepares a law to stop small unions from bringing entire sectors to a standstill.

Railways operator Deutsche Bahn (DB) said it cancelled two-thirds of long-distance passenger services on Wednesday as train drivers staged a new walk-out that was expected to last more than a week.

The strike, the latest flare-up in a protracted and increasingly bitter dispute, had begun on Tuesday, initially affecting freight services, but was extended to passenger services from 0000 GMT on Wednesday (8AM Singapore time).

Drivers' union GdL has not said how long the strike would last, only that it would be longer than the six-day industrial action at the start of May. It has said it would give 48 hours' notice when the strike will end.

The industrial dispute centres on wages, work hours and negotiating rights between the small GdL union and the national rail operator.

In early May the union staged a nearly week-long walkout, the longest in DB's history, which industry groups estimated cost Europe's top economy almost half a billion euros (S$744 million).

- Turf war -

The GdL, which represents some 20,000 train drivers, is demanding a wage rise and shorter work hours as well as the right to represent other rail workers such as conductors and restaurant carriage staff.

That demand is effectively a turf war with the larger railway union EVG, which has more than 200,000 members, and which is now involved in separate, less-heated wage negotiations with DB.

Deutsche Bahn confirmed on Wednesday that two-thirds of long-distance services would be cancelled and an average of one-third of regional services, varying from region to region.

In freight services, around two-thirds of trains would run, the company said.

Eastern Germany was particularly hard-hit. And fewer than half the regional trains in Berlin and Hamburg, Germany's second biggest city, were running.

DB said it would "do everything in its power" to ensure that as many services as possible could run to help holiday-makers at the upcoming long weekend marking the Christian Pentecost holiday.

- 'Pointless escalation' -

"We appealed to GdL yesterday to call off the strike," DB spokesman Achim Stauss told a news briefing in Berlin.

"We hope reason will prevail. It just can't be that millions of people are affected by this pointless escalation. Following Christmas and Easter, Pentecost is one of the busiest times for holiday travel and millions of people will be grounded," Stauss said.

Deutsche Bahn transports around 5.5 million passengers and over 600,000 tonnes of cargo in Germany every day.

The employers' federation BDA said the latest walkout would poison the traditionally consensual atmosphere between management and unions in the German system of wage negotiation in future.

"GdL's behaviour is an attack on wage autonomy in Germany," raged BDA president Ingo Kramer, accusing the union of taking passengers "hostage out of purely egotistical organisational interests".

BDA said that the economic costs of the strike were "immense," estimating them at as much as 100 million euros per day, with the automobile, steel, chemicals and raw materials sectors particularly hard hit.

- One union, one deal -

Germany has faced a series of industrial disputes in recent months.

Its biggest airline, Lufthansa, has been hit by a series of pilots strikes in a dispute over early retirement provisions.

Stoppages have also hit the postal and logistics giant Deutsche Post and, most recently, kindergartens.

The current left-right "grand coalition" government under Chancellor Angela Merkel is working to limit the powers of very small unions with a law that would oblige employers and the largest unions among their workforces to negotiate in industrial disputes.

Under the draft legislation - which is scheduled to be approved in parliament on Friday - the largest union within a company should negotiate with management in wage talks. And that deal would then have to be adopted by smaller unions representing the same group of employees.

Unions, both small and large, object to the legislation and have said they will take the case to the German constitutional court if passed.