German Chancellor Angela Merkel’s government was to decide Tuesday whether to fire the domestic spy chief as an explosive row over immigration and the far-right once more rocks her coalition.

The controversy has sparked the second major stress test for a weakened Merkel’s fourth-term government forged half a year ago between her centre-right CDU, its conservative Bavarian sister party CSU and the centre-left Social Democrats (SPD).

The three party chiefs last week huddled to discuss the fate of Hans-Georg Maassen, head of the BfV intelligence service – but postponed the tricky issue until yesterday.

Maassen became the focus of controversy earlier this month after raising doubts about the veracity of reports about far-right hooligans and neo-Nazis randomly attacking immigrants in the eastern city of Chemnitz in late August.

Maassen has rejected accusations that he has supported AfD lawmakers with early access to unpublished data and advice on how to avoid surveillance by his BfV.

Social Democrat leader Andrea Nahles has insisted Maassen must go and SPD youth wing leader Kevin Kuehnert, 29, mockingly tweeted that he should either explain his conspiracy theory or “throw in his tin-foil hat”.

However, Maassen has received the backing of his immediate boss, the CSU’s hardline Interior Minister Horst Seehofer, who has for three years been Merkel’s nemesis within the ruling grand coalition.

Less than three months on, and with that bitter dispute barely papered over, the conflict over Maassen’s fate once more highlights the deep chasms within Merkel’s coalition.

On one level, both major parties, the CDU and SPD, are distrustful partners stuck in a political marriage of convenience after the AfD, a one-time fringe party, poached millions of their voters in last year’s elections.

But the rift is deepest between Merkel and Seehofer, whose own political future hangs in the balance as his CSU braces for potentially massive losses to the AfD in Bavarian state elections next month.

Die Welt daily reported Monday that Merkel had now decided to let Maassen go, quoting unnamed coalition sources.

According to the newspaper, this could have wider political ramifications: Maassen had reportedly told a closed-door meeting of conservative lawmakers that “Horst Seehofer told me that if I fall, he falls too”.

Merkel last week said only that “the coalition will not break up” over the issue, a claim she repeated on Monday.