Fischer, who works for the rival Nabucco pipeline project, told German business daily Handelsblatt: "South Stream is the Russian's response to the Nabucco project. But it brings no diversification of (gas) sources to Europe."
The retired head of the environmental Green party, added: "Economically, South Stream makes no sense. Politically, it is not in Europe's interest."
Europe and Russia are competing for access to vast energy reserves in the Caspian region of Azerbaijan, which lies between Russia and Iran and has turned towards the west since the collapse of the Soviet Union.
The Nabucco project aims to transport natural gas from the Caspian Sea to Europe via Turkey from 2013 to reduce European dependency on Russian gas. Moscow has sharply criticised the plan and has drafted its own rival scheme, South Stream.
Another Russian-dominated gas pipeline to Europe via the Baltic Sea, dubbed North Stream, has hired former German Chancellor Gerhard Schröder as one of its top managers.
Last week, Russia signed agreements that would double the amount of natural gas it buys from Azerbaijan, which could deprive Nabucco of gas produced by the resource-rich Caucasus country and put its viability in doubt.
Fischer did not confirm that a final decision on going ahead with the Nabucco pipeline would be made by the end of this year meanwhile, stressing that dates "must not be written in stone."