The far-right Alternative for Germany party wants to discipline a candidate who captioned a picture of himself as the “friendly face of National Socialism”.
Matthias Helferich used the phrase in leaked text messages which came to light after he was selected as a candidate for September’s general election.
Mainstream parties shun the AfD because of its hard-right stance and some of its members have long been accused of trivialising the Nazi era.
Party bosses want Mr Helferich stripped of his regional leadership role and banned from holding any position within the AfD for two years. But it is too late to remove him from the party list for the election on September 26.
Mr Helferich blamed internal party feuding for the controversy and said his comments were taken out of context.
He did not deny sending a message while on the campaign trail in 2017 calling himself the “friendly face of NS”, a term for Nazi ideology.
But he said the message was a joke and that he was satirising a term that critics on the left had applied to him.
Mr Helferich denied that another message in which he appeared to attribute a quotation to “the Fuhrer” was an endorsement of Adolf Hitler.
He acknowledged joking about notorious Nazi judge Roland Freisler but said this was a pastiche of a remark made by Germany's former chancellor Konrad Adenauer.
He denied having links to neo-Nazis after this was alleged by broadcaster WDR, which first published the messages.
“I am certainly not someone who would quote Adolf Hitler,” he said. “I wouldn’t know what would be worth quoting from him.”
Despite Mr Helferich's explanations, the AfD’s federal board is seeking to remove him from a leadership role in its North-Rhine Westphalia regional branch.
This is the state where Mr Helferich is seventh on the party list, meaning he would win a seat in Parliament if the AfD performs well enough there.
However, there was no majority among party officials for expelling Mr Helferich from the AfD, German media reported.
North Rhine-Westphalia is the state governed by Armin Laschet, the front-runner to succeed Angela Merkel as Germany’s chancellor.
The earliest ballot papers can be issued on Tuesday for the contest, meaning it is too late to change party lists.
Polls suggest the AfD may underperform compared to its national result in 2017, when it surged into Parliament for the first time with 12.9 per cent of the vote.
As well as the anti-refugee line which helped it rise to prominence, the AfD has taken a hardline stance against coronavirus lockdowns.
But the party has been plagued by infighting and some sections of the AfD have attracted surveillance from German intelligence services.
Because of its far-right stance and claims of extremism in its ranks, none of the other major parties in Germany will co-operate with the AfD.
Nonetheless its presence in Parliament could contribute to messy coalition talks after the election.
