* Merkel protegee gives up ambition of succeeding her

* Merkel pressured to go early to make way for successor

* But party grandees value her popularity, want stability

By Andreas Rinke and Paul Carrel

BERLIN, Feb 19 (Reuters) – A powerful caucus of German conservatives wants Angela Merkel to stay on until her term ends in October 2021, dismissing calls for her to step down sooner and hand power to the next leader of her Christian Democrat (CDU) party.

The succession debate was blown wide open last week, when CDU leader Annegret Kramp-Karrenbauer said unexpectedly she would no longer seek to succeed her mentor Merkel, a step that raised questions over the future course of Europe’s largest economy.

Explaining her decision, Kramp-Karrenbauer said separating the roles of party leader and chancellor “weakens the CDU”. That remark fuelled speculation that Merkel would have to hand over the chancellor’s job to the next party leader.

Much depends on who wins the CDU leadership race, a contest that is just starting and which will likely take months.

But conservative heavyweights are already resisting popular pressure – and some suggestions from within the CDU – for Merkel to go before her term ends 18 months from now.

“Merkel is still very successful and popular in Germany and internationally,” said Juergen Hardt, foreign policy spokesman for the conservatives’ parliamentary group. “So there is no reason to change anything.”

Hardt sits on the parliamentary foreign affairs committee chaired by Norbert Roettgen, who entered the CDU leadership race on Tuesday and said the question of who should run as chancellor could be decided later, around the end of the year.

Andreas Nick, another CDU lawmaker on the same committee, said Merkel’s strong standing abroad would be important during Germany’s EU presidency in the second half of this year. Talk of her going early was “a purely academic discussion”, Nick added.

COHABITATION ARRANGEMENT

A cohabitation arrangement of party chair and chancellor would be harder if erstwhile Merkel rival Friedrich Merz wins the party leadership.

The centre-left Social Democrats – junior partners in Merkel’s ruling coalition – have signalled they could quit the government if she is forced out as chancellor.

In that event, Germany may be plunged into new elections – a scenario that another CDU lawmaker, speaking on condition of anonymity, said would “damage the party’s image for stability”.

A further CDU lawmaker reckoned on a 2-3 percentage point dip in support whenever Merkel goes – a potentially critical hit as recent opinion polls put the CDU and its Bavarian CSU allies as little as 3-4 points ahead of the ecologist Greens.

“So there is a lot to be said for the coalition and the chancellor remaining in office until autumn 2021,” Hardt said.

A survey for Der Spiegel magazine published on Tuesday showed Germans were evenly split on whether or not Merkel should quit when the CDU chooses a new leader and chancellor candidate.

After nearly 15 years as chancellor, Merkel has said she will not seek re-election.

Spiegel has called in an editorial for Merkel to go early. Some conservatives are starting to criticise her more openly.

Health Minister Jens Spahn, a contender to become CDU leader, told Spiegel he respected Merkel “but now we are looking forward.” And Armin Laschet, premier of the state of North Rhine-Westphalia and another contender, on Sunday took aim at her for being too slow on EU reform.

But Daniel Guenther, CDU state premier in Schleswig-Holstein, wants the CDU to keep Merkel centre stage right up to the next election. “We can benefit from the support she has from the people,” he told broadcaster ARD.

Crucially, CSU leader Markus Soeder said on Sunday: “I believe that breaking with the chancellor is not right.” Any CDU chancellor candidate will need Soeder’s backing. (Writing by Paul Carrel Editing by Helen Popper)