Berlin: The far-right Alternative for Germany party (AfD) has been thrown into disarray months before national elections after its leader stepped down as its candidate for chancellor.

Frauke Petry had become the face of the anti-immigration party, which hurt Chancellor Angela Merkel's conservatives during the migrant crisis but has leaked support this year. After a months-long power struggle, she announced on Wednesday she would not lead the party's national election campaign.

The shock move was widely seen as an admission of defeat, even though she stays on as the party's joint leader.

In a test of how much influence she still wields, Petry will this weekend try and push through a motion at a party congress aimed at making the AfD able to join coalitions in the future.

Germany's Central Council of Muslims said that the AfD was on a path to becoming an even more radical, anti-Islamic party without co-chief Petry leading it into September's national election.

Her rivals, she has said, want the AfD to be a "fundamental opposition" party.

"While Petry was always ready to have a critical dialogue with the Central Council of Muslims, other forces in the party leadership completely refused," said Aiman Mazyek, head of the council.

Mazyek told the Neue Osnabruecker Zeitung daily the AfD was "soaking up" the far-right National Democratic Party (NPD), which Germany's Constitutional Court earlier this year said pursued Nazi ideals.

The AfD last year endorsed an election manifesto that says Islam is not compatible with Germany's constitution. Mainstream parties have ruled out the AfD as a possible coalition partner.

Ahead of September's federal election, Petry had sought to make the party more palatable to mainstream voters and her decision not to lead the party's campaign could play into the hands of established parties.

Simone Peter, a leading member of the Green party, told the Rheinische Post newspaper that with Petry's decision, the AfD was "skinning itself".

"The party's extreme right-wing views ... are coming increasingly to the fore," Peter said.

Petry's critics say it was she who was responsible for pulling the party to the right with incendiary rhetoric such as demanding police be allowed to shoot illegal migrants.

The energetic East German ousted party founder Bernd Lucke as leader in 2015. She swiftly embraced immigration as the party's cause-celebre rather than euro-scepticism.

She soon made enemies within the party, though, who criticised her for a high-handed leadership style.

In the past six months, support from the party has fallen to between 8 and 11 per cent in polls from about 13 per cent.

Political commentator Albrecht von Lucke said the party's congress this weekend in Cologne, where police are bracing for up to 50,000 anti-AfD demonstrators, would be a showdown between Petry and her party rivals.

"The crucial thing is whether the party dismembers itself on Sunday," said von Lucke. He added that if Petry failed to pass her motion she would risk being a "queen without a country".

"If she goes, then we'll see whether the rest of the party can survive," he said, adding the party may even jeopardise the 5 per cent popular support needed to enter the lower house of parliament.

Reuters, Telegraph, London