By Madeline Chambers
BERLIN (Reuters) - Germany's decision to expel Russian diplomats has split the Social Democrats (SPD), Chancellor Angela Merkel's coalition partner, undermining her tough stance on Moscow just two weeks into a new government.
Berlin is sending four diplomats back to Russia, joining other European states and Washington in a concerted response to a nerve agent attack on a former Russian spy in England which Britain blames on Russia. Moscow denies any involvement.
"We must do everything possible to prevent a new Cold War with Russia," Social Democrat Gernot Erler, government coordinator for Russia, told the Passauer Neue Presse.
He said Germany had a clear and unshakeable position, "but we want to stay in dialogue with Moscow".
While there is broad consensus on the response at the top of Merkel's conservatives and the SPD uneasiness among the SPD's rank and file is growing.
The far-right Alternative for Germany (AfD) and radical Left parties have already criticized the government's stance and German business groups have also sounded warnings.
Merkel, who has a tricky relationship with Putin, and her SPD Foreign Minister Heiko Maas have repeatedly called on Russia to cooperate, said it is almost certain Russia was behind the attack and that Germany stands by Britain.
Some prominent SPD members have gone further than Erler who stopped short of criticizing the government.
Former European Commissioner Guenter Verheugen said any sanctions should be based on facts, not suspicions.
"The view that if in doubt, 'Putin and the Russians are responsible for everything', is one that poisons thought and must stop," he told the Augsburger Allgemeine daily.
Former foreign minister Sigmar Gabriel said Verheugen's comment showed "courage and a cool head".
While dissent among Merkel's conservatives was muted, business groups are worried.
Sales to Russia rose last year for the first time since 2012 when sanctions over Moscow's role in the Ukraine crisis dented what was a 38 billion-euro ($47 billion) export trade. Exports in the first eleven months of last year were 24.1 billion euros.
Germany also needs Russia for roughly a third of the gas it uses, and on Tuesday it said it had approved the construction and operation of the Russia-built NordStream 2 gas pipeline.
The German Committee on East European Economic Relations warned against "over-hasty conclusions", saying political reprisals risked a "spiral of escalation".
(Additional reporting by Paul Carrel and Thomas Escritt; Writing by Madeline Chambers; Editing by Robin Pomeroy)