As the 600 delegates began filing into the congress venue, a hotel in the western city of Cologne, singing and chanting protesters attempted to stop them passing through security barricades, leading to scuffles with authorities. Two police officers were injured.
Up to 50,000 demonstrators were expected to mobilise during the two-day gathering of the anti-immigration Alternative for Germany party, with 4,000 police officers dispatched to keep the peace.
As the congress began, AfD co-leader Frauke Petry failed in her bid to rally members behind a more moderate-sounding programme based on pragmatic "Realpolitik" intended to shut down the party's more extremist voices.
In a fervent appeal opening the event, Petry said the AfD could still aim to become Germany's top party by the next general election in four years' time if it softened the harder edges of its message.
Members needed to decide "whether and how the AfD can become a realistic option to take power for voters by 2021 so we don't permanently leave the government to the established parties," she said.
The AfD, now represented in 11 of Germany's 16 states, aims to sign off on a programme that will pave the way for the party to enter the national parliament for the first time in its four-year history.
But its fortunes have declined as the number of new arrivals has dwindled, and all of Germany's mainstream parties have ruled out working with it if it clears the five-percent hurdle to representation in the September 24 election.
Opinion polls show the AfD at between seven and 11 per cent, a steep drop from the 15 percent support it drew only late last year.
Merkel is seeking a fourth term after nearly 12 years in power and her conservative Christian Democrats are currently leading the polls.
But after weeks of bitter infighting, Petry made the shock announcement Wednesday that she would not seek to lead the AfD's campaign this year. The news left the party reeling and set the stage for a showdown between populist and more radical forces.
Petry's chief rival, 76-year-old Alexander Gauland, a hardline defector from Merkel's CDU, had urged delegates to defeat her Realpolitik motion, calling it "divisive".
Denouncing "provocations" by party officials, Petry had also called for the ouster of an AfD state leader, Bjoern Hoecke, who in January sparked outrage by slamming Berlin's vast Holocaust memorial as a "monument of shame".
Analysts say there is little appetite among most Germans for radical change, particularly after the victories of Donald Trump in the United States and the Brexit camp in Britain.
News website Spiegel Online said the party's inner turmoil also diminished the threat it posed to the establishment in Europe's top economy.
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