Chancellor Angela Merkel's conservative Christian Democrats (CDU) are facing the prospect of another blow in Sunday's local elections in Berlin as tensions unleashed by Germany's refugee crisis spark a surge in support for a new populist, right-wing party.

Signs that the anti-foreigner Alternative for Germany (AfD) will continue its recent run of electoral successes in Berlin could bring to an end the city state's current ruling coalition, which has been dogged by scandal stemming from the building of a new airport and claims of administrative chaos.

The Berlin ballot will be the third set of German regional elections in as many weeks, which the AfD have used to turn into referendums on Merkel's handling of the nation's refugee crisis.

Berlin's popular Mayor Michael Mueller is expected to pull off a modest victory on Sunday with a voter survey published on Thursday by pollsters Forsa showing his left-leaning Social Democratic Party gaining 24 per cent of the vote in Germany's biggest city.

A strong AfD vote on Sunday could result in Mueller dropping the CDU as his current coalition partner and forging a potentially volatile three-party alliance with the environmental Greens and the hard-left Die Linke.

Published in the daily Berliner Zeitung, the Forsa poll showed Merkel's party and the Greens battling it out for second place on Sunday with 17 per cent.

The AfD is forecast to score 13 per cent of the vote in Berlin – lower than the 20.8 per cent it garnered two weeks ago in the north eastern state of Mecklenburg-Vorpommern but up on the 7.8 per cent it obtained in last weekend’s municipal elections in the central state of Lower Saxony.

Mueller warned this week on his Facebook page that a 10-to-14 per cent vote for the AfD "would be seen throughout the world as a sign of the resurgence of the right wing and Nazis in Germany."

But success for the AfD in Berlin would mean that the party has now gained a foothold in 10 of Germany's 16 states, helping it to build political momentum ahead of next year's national elections.

After years of stagnation following the fall of the Berlin Wall in 1989, Berlin has recently been shedding its image as the capital of welfare recipients and high debt.

Once dubbed by a former mayor as "poor but sexy," the city appears to have started to hit its economic stride thanks to a tourist boom and a flood of investment into the city's vibrant IT-startup businesses.

Berlin authorities expect the city to grow by 2.5 per cent this year after the local economy raced ahead by 3 per cent in 2015 – almost double the national average of 1.7 per cent.

But the arrival last year in the city of 100,000 refugees mainly fleeing wars in the Middle East and Africa served to expose the often shambolic local administration, which Mueller has blamed on job cuts.

Even before then, the local authorities were struggling to cope with the fallout from Berlin's rapid population growth, which has pushed up rents and added to pressures on public services such as education.

But the chaotic scenes at Berlin refugee registration centres quickly turned into a major political embarrassment for Mueller and his government.

This week Merkel - herself a Berlin voter - lashed out at Mueller saying the CDU takes integration seriously.

"The ruling SPD mayor declared himself, however, not responsible and pushes the responsibility away from himself," the chancellor told the daily Tagesspiegel.

Simmering away in the background has been the row over Berlin's new international airport, which has been hit by ballooning costs, construction delays and fraud allegations.

The German media is already speculating that the government could soon announce that the opening of the airport planned for late next year has been delayed for a fifth time.

CDU leader in Berlin Frank Henkel hopes to rescue his party's prospects on Sunday after a law-and order campaign aimed at tapping into voters' fears about terrorism and petty crime.

Henkel has also attempted to capitalize on voters' apparent concern about the SPD, Greens and Die Linke sharing power in a so-called red-red-green coalition with campaign posters across the city declaring: "Only those voting CDU will prevent red-red-green."

Given the possible party combinations, pollsters Forsa added a note of caution along with their latest opinion poll, warning that almost half Berlin voters are still undecided about who to support.

"As a result, the votes on election day may well differ from what has been determined is the current mood," Forsa said.

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