* Power struggle at top upsets AfD

* Hamburg election in February crucial for party

* Merkel's conservatives hurt by AfD's ascent

By Erik Kirschbaum

HAMBURG, Germany, Jan 18 (Reuters) - Sounding more like the economics professor he once was than the dangerous far-right firebrand some say he has become, Bernd Lucke spoke at length about the perils of the euro zone and unfettered immigration at a campaign rally last week.

Some 400 conservative, grey-haired men had gathered in a basement of a Hamburg skyscraper on a stormy night to hear the Alternative for Germany (AfD) party founder, a 52-year-old father of five.

Lucke ended his economics lecture and switched into crusading mode: "We won't be blackmailed by a dinky little country with just 2 percent of the euro zone's gross domestic product," he shouted, referring to Greece.

In two years, Lucke has taken the AfD into the big time -- not with rhetoric or personal charisma, but with an academic approach that reassures his older, conservative audiences.

The AfD entered the European Parliament last May with 7.1 percent, then shocked Germany by winning about 10 percent in three regional elections in the east, stealing voters from Angela Merkel's Christian Democrats (CDU).

The party is now at a crossroads ahead of an election in the city-state of Hamburg next month. If the AfD enters the regional assembly, it would mark its first major success in western Germany, establishing the party as a national force and strengthening Lucke.

Should the AfD fail in Hamburg, the influence of more right-leaning members behind the party's victories in the east and who are flirting with anti-Islam protesters in Dresden, will grow.

"The AfD has been trying to cover a vast range, from those backing liberal economic policies to the national conservative patriots and all the way to the swamps of the far-right," said Thomas Jaeger, a political scientist at Cologne University.

"They've tried to paper over the underlying conflict but that's blowing up in their faces," he said. "It's make or break time for the AfD. Either they'll sort it out or they're doomed."

The AfD power struggle erupted into public view this month.

Lucke wants to change its charter at party congress on Jan. 31, giving the party one leader instead of three. For that, his two co-chairs called him a "despot-style leader". Lucke ally Hans-Olaf Henkel called them "scurrilous".

The AfD tried to defuse the dispute by agreeing to have two leaders from April and one from December. Lucke will face off then against co-chair Frauke Petry, AfD leader in the eastern state of Saxony.