* AfD has lost ground as refugee numbers drop
* Party also riddled with infighting
* Revival of Social Democrats has also cost it support
By Michelle Martin
BERLIN, March 2 (Reuters) - Seven months before a national election, the right-wing Alternative for Germany is losing voters while parties in neighbouring countries with similar anti-immigrant platforms hold their own against mainstream rivals.
Riddled by infighting, the AfD has seen its support fall by almost a third to around 10 percent in just two months as a drop in migrant arrivals had diluted its main function as a conduit for voter concerns about refugees.
It is also up against a reinvigorated Social Democrat (SPD) party well placed to present a genuine challenge to conservative Chancellor Angela Merkel in September's election.
"People are no longer talking about the refugee issue so much and that was the AfD's main vehicle," said Manfred Guellner, managing director of the Forsa polling institute.
So while anti-immigrant parties in France and the Netherlands, which hold national elections this spring, continue to poll upwards of 15 percent, recent surveys in Germany show the AfD at between 8.5 and 11 percent, down from a high of 15.5 percent at the end of 2016 as an internal feud has festered.
More than a million migrants have arrived in Germany in the last two years and the AfD has capitalised on voters' fears with slogans including "Stop the asylum chaos!" But arrivals fell by two-thirds last year and the government is deporting rejected Afghan asylum seekers.
Carsten Koschmieder, political scientist at Berlin's Free University, said that posed a problem for the AfD as it gave the impression the government had got the situation under control.
The party faces an early electoral test on March 26 in the western region of Saarland, where recent polls give it support of 9 to 10 percent.
The AfD split in two in mid-2015 and another bout of infighting kicked off in January when Bjoern Hoecke, its leader in the eastern state of Thuringia, called Berlin's Holocaust Memorial a "monument of shame" and said history books should focus more on German victims.
AfD co-leader Frauke Petry and her supporters wanted him expelled but others defended him. Two-thirds of the executive board voted to oust him and a party arbitration body must now decide whether to let that stand.
Some party members say the feud could cause another split.
On Sunday the party sent some 28,000 supporters a declaration, signed by Hoecke and Petry, saying the row had detracted from its aims and urging them to "close ranks".
Asked about the risk of a split, Petry told Reuters: "The AfD is the AfD and the majority decides where we're going."
Thomas Jaeger, a political scientist at Cologne University, said Hoecke's speech made supporting the AfD much more socially unacceptable and the conflict was hitting its ratings.
"Voters never want to see a party arguing as it makes them think the party ... doesn't care about the people," he said.
Adding to the AfD's problems, the centre-left SPD in January chose as its chancellor candidate Martin Schulz, formerly European Parliament president and a man admired for his common touch who is campaigning on fighting inequality.
Forsa's Guellner said the "Schulz effect" had probably cost the AfD around 1 percentage point in support.
"(The Social Democrats) have won back a lot of people whose eyes had previously strayed to the AfD because the socio-economic system here leaves them feeling hard done by," added Cologne University's Jaeger.
The SPD is almost neck-and-neck with Merkel's conservatives in polls, leaving the AfD on course to place a distant third on Sept. 24.
Petry was unperturbed, saying: "I think there's still a lot of scope before the federal election." (additional reporting by Frank Simon in Osterhofen; Writing by Michelle Martin; editing by John Stonestreet)
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