Martin Schulz, left, and Sigmar Gabriel in 2014 | Archive Martin Schulz backs off on chancellery bid: report Outgoing European Parliament president was pushed not to run against SPD chief Sigmar Gabriel.

Martin Schulz, the departing president of the European Parliament, told officials of his Social Democrats that he wouldn't run for chancellor in Germany’s national elections next September, according to a report by Spiegel magazine, quoting anonymous sources.

Schulz announced in November that he would not seek re-election for a third term as Parliament president in January and would run for a seat in the German Bundestag, the lower house of the parliament, instead. In Berlin, Schulz's decision to ditch Brussels was widely seen as a declaration to run against Chancellor Angela Merkel as the Social Democrats' candidate.

But Spiegel reported that Schulz told Genossen, the German term for officials in the Social Democrats party (SPD), he no longer expects to become the party's candidate.

“Although it is an open secret in the SPD that he would like to become a candidate for the chancellery,” the story said, “he was put off from running against [Sigmar] Gabriel,” the current SPD leader.

Discussions over who should run against Merkel have rattled the SPD, Germany’s second-largest party, for months.

While Gabriel, as party chief, would be entitled to run for office, many of his peers have criticized his candidacy pointing to low popularity rankings. Since then, however, the 57-year-old managed to boost his standing, scoring various political wins, such as pushing current SPD Foreign Minister Frank-Walter Steinmeier to become German Federal President next year.

Earlier his week, an influential, moderate grouping within the SPD publicly confirmed their support for Gabriel's candidacy.

“Sigmar Gabriel is the best candidate, who will become a great chancellor,” Johannes Kahrs, a German MP and one of the spokespeople of the so-called Seeheimer Kreis (“Seeheim Circle”) — one of three major groups within the SPD — told POLITICO on Thursday.

Merkel announced in November that she would seek re-election for her conservative Christian Democrats party next year.

The SPD will officially announce their candidate at a party summit in late January. Before that, an inner circle of SPD officials will meet on January 10, for a closed-door meeting to decide on who to nominate, according to a report in Tagesspiegel newspaper.

Janosch Delcker in Berlin contributed to this article.