Thursday, March 11, 1999 Published at 20:08 GMT
The demise of 'Red Oskar'
Oskar Lafontaine: Let Schröder lead SPD to election victory
Many in Germany saw Oskar Lafontaine as the power behind the German throne.
He was described as "Red Oskar" or "Little Napoleon" - a reference to his appearance, his fluency in French and his suspected political ambitions.
Last year he stood aside to allow Gerhard Schröder to lead the Social Democrat Party (SPD) to election victory.
In return he was appointed finance minister, but commentators predicted that the ideological differences between Mr Schröder and his finance minister could ultimately make their working relationship impossible.
Up until now, there was no rift between the two most powerful men in Germany - at least not officially.
Chairmanship given up
Mr Lafontaine also resigned as chairman of the SPD, a post he had held since November 1995.
The SPD dominates the coalition that took office after a general election on 27 September 1998 and brought an end to 16 years of conservative government in Germany, most of it under Christian Democrat Helmut Kohl.
Since its election triumph, however, the coalition has been plagued by internal disputes over tax reforms, proposals to scrap nuclear energy, and policy towards the European Union.
As finance minister, Mr Lafontaine was at the heart of those disputes.
The timing of Mr Lafontaine's resignation is crucial as Germany faces key decisions on financial policy as the European Central Bank and the euro establish themselves.
Germany currently holds the six-month EU presidency.
The 55-year-old joined Germany's SPD in 1966 and was elected deputy to the state parliament in 1970.
He became Germany's youngest mayor when he took on the post in Saarbrücken, the state's main city, in 1976 at the age of 32, graduating to state SPD chief a year later.
In 1985 he was elected prime minister for the Saarland, which was previously staunchly conservative, and was twice re-elected. In 1987 he was named as one of the SPD's five vice-presidents.
In 1990 he ran unsuccessfully as the party's candidate for the chancellorship against Helmut Kohl.
Vilified by British press
The German finance minister has been vilified for his plans on tax harmonisation, but controversy is nothing new to him.
He first hit the headlines while ploughing the furrow of local politics in his home region, Saarland, by demanding the United States remove its nuclear weapons from German soil.
Later, after German reunification he provoked the wrath of new voters in the East with pessimistic forecasts of the cost of building the new Germany.
He nearly paid the ultimate price for his views when he was attacked by a deranged woman who stabbed him in the neck.
The incident plunged him into a five-year depression, but he eventually bounced back into national political life.
Mr Lafontaine has also weathered corruption allegations and was forced to pay back more than £40,000 he received when retiring as mayor of Saarbrücken.