By Ray Furlong BBC correspondent in Berlin

The German Chancellor, Gerhard Schroeder, is still licking his wounds after his Social Democratic Party's (SPD) debacle in elections to the Saarland state Parliament at the weekend - but there is no let-up to the pressure he is under.

This being Monday, thousands of angry protesters will take to the streets of towns and cities across eastern Germany to vent their frustration at his government's social and economic reforms.

Protesters have been taking to the streets every Monday

The demonstrations have been taking place every Monday since the beginning of the summer, and while the numbers are now falling, they set the scene for further SPD defeats in Brandenburg and Saxony state elections later this month.

"The policies of the government go against the principles of social justice," says 47-year-old Manfred Schenk, who goes to the protests most weeks.

"I'm not sure the demos will change anything, but maybe the government will pay more attention to social issues."

Because he is unemployed, Mr Schenk is directly affected by the piece of legislation that has become the focus of the protests.

Change needed

It is called Hartz IV, after the Volkswagen executive Peter Hartz whose policy recommendations inspired it, and includes cuts in benefits for the long-term jobless.

"I voted for the SPD and am completely let down by them. They've changed their policies and are targeting the small man," says 31-year-old salesman Thomas Gutnor.

For Schroeder, it's really hard to get the message through: we can't finance our social system any more and we need to change it Dagmar Dehmer, Der Taggespiegel

"I'm hesitating about who to vote for in the elections in a fortnight. The PDS is the only left-wing protest party left."

This is the kind of sentiment that is giving Mr Schroeder a headache. The PDS, the reformed communist party, looks set to win major victories in the Brandenburg and Saxony polls at the expense of the SPD.

That fits a long-term pattern. Sunday's defeat in the Saarland, where the SPD scored its worst result since 1960, followed a series of setbacks in state elections since Mr Schroeder unveiled his reform policies last year.

"For Schroeder, it's really hard to get the message through: we can't finance our social system any more and we need to change it," says Dagmar Dehmer of Der Tagesspiegel newspaper.

"It's hard for the people to understand that, because the system has worked fine for 40 years."

Gains

With around 4.5 million people unemployed and the economy just stirring into life after three years of stagnation, Mr Schroeder has insisted that he will press on with his policies.

But in a sign of wavering, his government agreed at the weekend that no new reform initiatives would be launched before the next federal election in 2006.

Meanwhile, there is another cloud on the horizon. Surprise gains were made in the Saarland election by the far-right NPD party, which the government unsuccessfully tried to outlaw.

It won 4% of the vote - not enough to get a seat in the Saarland parliament. But it is widely expected to win seats in Brandenburg and Saxony - a return to state parliaments for the first time since 1968.