Merkel's rival admits income broke the law

Peer Steinbrück, the main challenger to the Chancellor, Angela Merkel, in next year's German elections, faced a barrage of criticism yesterday after he revealed that he had earned €1.25m (£1m) as a public speaker and admitted breaking the law by failing to declare some of the income.

The confession was an embarrassing blow for the Social Democrat and former finance minister who launched his campaign to replace Ms Merkel as Chancellor last month with pledges to fight greed and tame the power of the banks and other financial institutions

Mr Steinbrück conceded that he failed to declare €23,000 he was paid last year for two lectures, one to executives at Südwestbank and the other to Kerkoff Consulting. "It was negligent of me. I forgot," he told a press conference.

As a member of the German parliament Mr Steinbrück was obliged by law to disclose earnings in excess of his parliamentary salary. Critics have charged that his sizeable external income laid him open to becoming beholden to the banks and big business.

Renowned for his abrasive manner, he attempted to counter his critics yesterday by publishing the details of all payments made to him. He insisted that in doing so he had gone "much further" than existing transparency rules required. "The suspicion that I may have become beholden is absurd," he said.

His admission will nevertheless have dented his efforts to convince Germans that he can manage the economy more capably than Ms Merkel.