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BERLIN, Jan 31 (Reuters) - Friedrich Merz, previously seen as the frontrunner to become Germany's next chancellor, faced a setback three weeks ahead of a crucial vote on Friday when 12 of his own lawmakers withdrew their support for his stance on a migration bill, leading to the bill's failure to pass in parliament.

Merz, whose conservative bloc has maintained a lead in the polls throughout the campaign, stirred controversy within his party by expressing readiness to pass the law with backing from the far-right, nativist Alternative for Germany (AfD), causing unease among party members.

Traditionally, centrist parties in German politics had always united to thwart the AfD, which is under surveillance by the country's security services, from gaining legislative influence.

Although Merz managed to secure a non-binding motion on migration in the lower house of parliament with AfD support on Wednesday, his own party members turned against him on Friday, dealing a blow to his leadership credentials.

Commenting on the situation, Thu Nguyen, deputy director of the Berlin-based Jacques Delors Centre, an EU policy think tank, criticized Merz's strategy by stating, "This move was entirely unnecessary. Merz had a significant lead in the polls and could have easily won the elections. Instead, he chose to seek the AfD's support to secure a majority—twice," she said, casting doubt on the prospects of a stable German government post-vote.

The proposed draft aimed to limit family reunifications for certain refugees and advocated for stricter border control, a position supported by two-thirds of the public according to a recent poll.

Merz defended the bill as a necessary response to a series of incidents in public spaces involving individuals with immigrant backgrounds. However, the Social Democrats (SPD) and Greens argued that the measures would not have prevented the attacks and would have violated European law.

SPD Chancellor Olaf Scholz shared a video on Instagram questioning whether Germany would tackle complex issues or succumb to the far right's false promises, highlighting the pivotal choices for the country's future.

The repercussions of the defeat on party standings are uncertain, as the SPD and their Green coalition partners, polling at 15% and 13% respectively, lag significantly behind the conservatives at 30%.

The AfD, ranking second in the polls and emboldened by their first parliamentary success in supporting Wednesday's resolution, criticized Merz for not garnering adequate backing for Friday's legislation.

AfD leader Alice Weidel expressed doubt about Merz's readiness for the chancellorship, stating, "Merz doesn't have what it takes to be chancellor. The conservatives lack unity."