*Poll ranks it least honest German party
*Merkel and her conservatives gain support
*FDP becomes liability as coalition partner
By Stephen Brown
BERLIN, Jan 7 (Reuters) - Angela Merkel's Free Democrat (FDP) allies took a drubbing in a poll on Friday portraying them as Germany's most dishonest party while leader Guido Westerwelle got poor reviews for a speech attempting to revive his fortunes.
The poll underlined what a liability the pro-business FDP has become for Merkel, with support for her conservatives on the rise thanks to the strength of the German economy but Westerwelle's party at its lowest in over 11 years.
The German chancellor did not comment on Thursday's speech by the unpopular Westerwelle -- her deputy and foreign minister -- which was seen as a desperate attempt to rally flagging support for the junior partner in Merkel's centre-right coalition.
While the mass circulation Bild hailed "General Guido" as a fighter, the Sueddeutsche Zeitung called it "clowning instead of clarity" and the Financial Times Deutschland thought it "absurd" that Westerwelle did not address calls for him to resign.
"The performance of Westerwelle...bordered on denial of reality. Nobody discussed the loss of confidence among voters and the life-threatening opinion poll levels," wrote the FTD.
While Merkel's Christian Democrats and their Bavarian sister party, the CSU, rose 4 points in the DeutschlandTrend poll to 36 percent -- their best performance in nine months -- the FDP hit 4 percent, which would not be enough to enter parliament.
Discontent bubbled on among party rebels who last month urged 49-year-old Westerwelle to resign. Joerg-Uwe Hahn, FDP leader in Hesse state, told reporters: "That can't have been everything. It must have just been the first part of the speech."
Nearly three quarters of those polled blamed the decline of the FDP -- which only 15 months ago won a record 14.6 percent in national elections -- on its inability to deliver the tax cuts it promised in that campaign because of the global recession.
Asked how honest political parties were with their election promises, the FDP came last with more than four out of five considering it dishonest, though all parties were found wanting.
MAY NEED GREENS
Crucially for Westerwelle, six out of 10 people polled did not expect him to be leading the FDP in a year's time. That will depend on how the FDP performs in seven state elections in 2011, with concern focused on the March vote in Baden-Wuerttemburg, where Merkel's conservatives risk losing power after 60 years.
Westerwelle could then face a leadership battle ahead of the annual party conference in May.
Simon Green, professor of politics at Aston University in Britain, said the German chancellor needs the FDP "to be strong enough to be electable but not so strong as to take away from the CDU's core voters, which is what you saw happening in 2009".
While the FDP is Merkel's "natural partner" and its demise, often predicted, has never materialised, in a five-party system it is unwise to rely permanently on any one partner, Green said.
"That's why the CDU needs in the long run to be able to talk to the Greens," he said, adding that by pushing the CDU to the centre Merkel has made it possible to envisage such an alliance, though a first CDU-Greens coalition in Hamburg recently failed.
The Greens rank third in size behind the Social Democrats and are seen gaining in this year's regional votes. They emerged as the least dishonest German party in the new opinion poll.
Six out of 10 of those polled said they appreciated Merkel's work on securing economic recovery, suggesting no incentive for populist policy moves like tax relief to help the FDP, though a new debt-brake law limits her room for fiscal manoeuvre anyway.
Personal approval ratings showed a growing gap between Merkel's conservatives and their junior partner. The chancellor rose 9 points to 53 percent, putting her in third place behind her popular defence minister and her interior minister.
Westerwelle ranked second to last with 22 percent, down 1 point. As foreign minister he has not been a great success, recently being embarrassed by Wikileaks' publication of U.S. diplomatic cables that described him as arrogant and vain.
(Writing by Stephen Brown; Editing by Angus MacSwan)