Gerhard Schröder, the German chancellor, will call next month for a European initiative to promote public spending on research, set minimum social standards in companies and tighten controls on international financial flows, senior members of his Social Democratic party said yesterday.

The plan, discussed at a meeting with leftwing SPD members of parliament at the chancellery last Thursday, is the clearest indication yet that Mr Schröder is reaching out to critics of capitalism within his party.