The German government on Friday proposed a new law change that would prevent the "neo-Nazi" National Democratic Party (NPD) from receiving public funds, effectively bankrupting it.

Interior Minister Thomas de Maiziere said that after holding consultations with the Justice Ministry and Finance Ministry, he had submitted a proposed constitutional amendment to the heads of parties in Germany's Bundestag.

The new amendments would affect Article 21 of the German constitution, which outlines the democratic principles German political parties must abide by. De Maiziere's proposal would add an additional paragraph prohibiting funding for parties "whose aims or whose followers behave in a manner that seeks to impair or eliminate the liberal democratic order."

A two-thirds majority in both chambers would be required to choke off state funding to the fringe party. The move could be completed before the end of the year, Justice Minister Heiko Maas said.

De Maiziere said the idea that a German party with a hostile view of democracy should receive official funding "is a situation that is hard to bear." Maas equated handing over state funds to the NPD to "a direct investment by the state in extreme-right rabble-rousing."

The NPD was founded in 1964 as a direct successor to the neo-fascist German Reich Party. It rails against foreigners and campaigners under the banner "Germany for the Germans."

Although the NPD only boasts some 6,000 members, it received just over 1 percent in the last federal elections in 2013 - insufficient for it claim representation in the Bundestag but enough to qualify for state campaign financing. Last year, it received around 1.1 million euros ($1.17 million) in public funds according to data disclosed by the parliament.

Anti-constitutional but legal

In January, Germany's Supreme Court in Karlsruhe rejected a legal bid from the Bundesrat (the German parliament's upper house) seeking to ban the NPD on accusations that it pursued a racist and anti-Semitic agenda.

The court ruled that although the party's attitude towards the constitution was deemed hostile, it did not pose a significant enough threat to German democracy for it to be outlawed.

"The National Democratic Party of Germany (NPD) advocates a concept aimed at abolishing the existing free democratic order," the court's judges said.

While that ruling did not outlaw the party, its findings about the NPD opposing German democracy would likely form the basis of any constitutional amendment seeking to starve the party of financing.

Mindful of the political abuses under Adolf Hitler's Nazi regime, Germany's legal system presents major hurdles for banning any form of political representation. Only one party has been banned in the post-war era, the Communist KPD at the height of the Cold War in 1956. Critics have also warned that any move to ban or starve the NPD of financing could drive its members underground and promote further radicalization.

dm/msh (dpa, AP, AFP)