It's notorious for its mix of gossip, inflammatory language, and sensationalism, which includes a daily picture of a topless woman on the front page. It receives more reprimands from Germany's independent press watchdog than any other paper. And it engenders fear in the hearts of politicians, who rarely dare to cross Bild – Europe's largest newspaper – which reaches 12 million readers daily.

Just ask Christian Wulff.

The German president found himself the subject of heated debate after articles appeared about the propriety of a private loan to finance his home. Having survived the initial storm, Mr. Wulff then made what may have been an even bigger mistake: threatening Bild. Since the spat started, his popularity has dropped precipitously and there have been calls for his resignation.

Bild has the undisputed ability to shape the careers of politicians from across the ideological spectrum. But its power to channel and magnify perceived public sentiments and its readiness to support or reject public figures is also highly controversial, with many observers charging that the paper abuses its clout.

"Bild is a high-risk factor for every public figure," says Hans-Jürgen Arlt, a professor of political communication at Berlin's Free University. "Its circulation and its constant readiness to judge and to condemn give it the capacity to cause a lot of damage."

Some high-profile figures see Bild as a threat. Judith Holofernes, a popular German singer who was asked in 2011 by Bild to appear in an ad campaign for the paper, refused in an open letter.

"Bild is a dangerous political instrument," she wrote, "a malicious creature that does not describe a certain Germany, but creates it."

It is often compared to The Sun, Rupert Murdoch's famous British tabloid, which has a similar circulation and style and wields comparable power in Britain.

'Only as powerful as politicians believe it to be'

"Bild can set the agenda politicians have to follow," wrote Michael Spreng, former editor of the sister publication Bild am Sonntag, on his blog Sprengsatz. "But it is only as powerful as politicians believe it to be."

Wulff assumed the presidency, largely a figurehead position, in 2010. He is a member of Chancellor Angela Merkel's Christian Democratic Union party, and she strongly backed him for the role.

In mid-December, several German papers simultaneously published reports that, during his term as prime minister of Lower Saxony, Wulff received a €500,000 ($640,000) home loan with unusually favorable terms from the wife of a wealthy businessman.

Faced with a media frenzy, Wulff apologized for not disclosing the loan before he became president. There is no evidence that Wulff broke any laws, but the consensus – acknowledged by Wulff in his apology – is that his actions were morally questionable and that his handling of the affair was clumsy.

But in early January, Bild reported that he called editor in chief Kai Diekmann just before details of the loan were about to be published and threatened legal action in an angry voice-mail message. Wulff apologized for the call but claimed he only asked for the article to be delayed by a day or two because he was out of the country. Bild says Wulff wanted to block publication of the article.

"This is not a power struggle," Mr. Diekmann wrote in a Jan. 6 editorial. "The president's political future is not decided by the media, but by the voters."

The tabloid's motto is "independent, nonpartisan," but it unabashedly nurtures relationships with politicians.

Bild was created in 1952 by German media tycoon Axel Springer, whose company owns other major regional and national publications. It traditionally sides with conservative forces, but it never cares much about the campaign colors of its allies.

Former Chancellor Gerhard Schröder famously described his public relations strategy like this: "All I need for successful government is Bild and television."

Mr. Schröder later fell out with Bild over what he said was unfavorable reporting of his social policies and boycotted the tabloid during his 2005 reelection campaign – an election he lost by a very small margin.

"The tabloids work on the elevator principle," says Leif Kramp, a media scientist at Bremen University in Germany. "If politicians want to be taken to the top level, they have to play nice – otherwise it's back down to ground floor."

Even Bild has limits to its power

In 2005, the paper reported that Green Party leader Claudia Roth had used her political position to advance her personal partner's business interests. Ms. Roth denied the claims and insisted that Bild publish a rebuttal from her. The paper took her to court, claiming there were no grounds for such a statement, but lost.

According to Roth, Bild threatened negative publicity and offered a friendly "home story" to try to get her to concede, but she declined and Bild finally published her statement.

Colleagues congratulated Roth on her courage. "What kind of world do we live in where it is seen as courageous if you defend yourself against outright lies?" Roth asked in an interview with Der Spiegel magazine at the time.

Karl-Theodor zu Guttenberg, former De­fense minister and Germany's most popular politician until he resigned last year, appeared on dozens of Bild front pages. The paper openly campaigned for his political ascent. "Party leader, state premier, or even chancellor – which post will Guttenberg take by storm in 2011?" one headline asked.

In return, the minister provided exclusives and a lucrative advertising campaign by the Army.

But even Bild could not help him when it emerged last year that large parts of his doctoral thesis were plagiarized. Until his resignation, the paper ran supportive articles and editorials and its editors appeared on talk shows defending Mr. Guttenberg.

Bild embraces its position. "It is not about power, it is about responsibility," Diekmann said in a recent newspaper interview on the German media blog xxl. "The same headline in Frankfurter Allgemeine [a more staid national newspaper] and in Bild will have completely different consequences."

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Bild's Sunday edition recently ran a story about a New Year's speech by Wulff in which he told his employees that "a year from now, this story will have been forgotten."

Needless to say, the article goes on to state that this is highly unlikely.