Dresden, Germany - Germany's Social Democratic Party (SPD), smarting after a crushing election loss in September, met Friday in the eastern city of Dresden to elect a new leadership.

The media were also expecting a fractious debate on policy, with some Social Democrats urging the party to offer a return to the days of more generous social welfare.

The party leader, Franz Muentefering, who is retiring after the party won only 23 per cent of the national vote at the September 27 general election, admitted to delegates that mistakes had been made.

"The SPD has become smaller, but not the ideas of social democracy," he said. "We are able to fight, we're willing to fight and we'll be back."

He said the SPD's mistake had been its failure to tell voters exactly what it planned to do and which allies it preferred.

The party led a coalition that ruled Germany from 1998 to 2005, and was in partnership with Chancellor Angela Merkel's conservatives from 2005 to this year. It has now gone into opposition at federal level, and is debating how it can return to power.

The party leadership has nominated a younger figure, Sigmar Gabriel, 50, to replace Muentefering, 69. The Dresden conference was called to elect the new leadership team into office.

In 1972, the party won 46 per cent of German votes and was esteemed as one of Europe's great movements, with broad support among the German working class and middle-class intellectuals.

The SPD's grass-roots membership has shrunk to 510,000, down by 400,000 compared to 1990. (dpa)