By Nick Antonovics
BERLIN, July 31 (Reuters) - The head of a committee devising German labour market reforms on Wednesday reiterated the aim of slashing unemployment, plans for which may be German Chancellor Gerhard Schroeder's last chance to win re-election in September.
"We are sticking to the idea that in three years we want two million less unemployed," Peter Hartz, personnel director at car maker Volkswagen AG , and head of the so-called Hartz Commission told a news conference after its penultimate meeting.
But other committee members said deep divisions on key issues remained to be settled before it could present final recommendations as scheduled on August 16. The committee is due to meet once more on August 9-10.
Hartz admitted the committee may need a couple of "night shifts" to complete its work.
Schroeder appointed the committee in February to propose radical reform of the way Germany's Federal Labour Office works following a scandal over bloated job placement statistics and gave it a mandate to report just before the September 22 general election.
The timing has ensured the committee's ideas have dominated early stages of the campaign, and helped turn attention away from the reality of rising dole queues.
Unemployment was 3.954 million in June and the head of the labour office, also a member of the Hartz committee, said on Wednesday there were no grounds to be optimistic about July data due to be released next week.
Schroeder said on the campaign trail in 1998 the Social Democrats would not deserve to govern if they could not significantly cut unemployment -- a soundbite the opposition is now playing back over telephone hotlines.
Opinion polls show the opposition with a clear lead with seven weeks to polling day.
Schroeder has scheduled a meeting of senior Social Democrats for August 18 to consider how to implement the report. He has promised its ideas will be taken on board as a whole and implemented as quickly as possible.
But the trade unions and some Social Democrat backbenchers have reacted coolly to Hartz's ideas, such as cutting unemployment benefits and fostering low-wage jobs, running the risk the party could appear divided just ahead of the poll.