Separate parties could probably reach more voters than the “current…conflict-prone constellation”, Meuthen told the Tichys Einblick news magazine in an interview published Wednesday.
“Everyone knows that Flügel and its key exponents are costing us a massive amount of votes in the conservative camp,” he said.
Flügel (Wing), which has about 7,000 members, was co-founded by notorious AfD lawmaker Björn Höcke, who has sparked outrage with attacks on Germany's culture of remembrance for Nazi crimes.
The AfD said in March that it was planning to dissolve the radical group after it was placed under formal surveillance by Germany's domestic intelligence agency.
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Intelligence officials said Flügel violated “characteristic features of the free democratic basic order, human dignity, democracy and the rule of law”.
Founded in 2013 as a protest party against the euro single currency, the AfD has since grown and shifted further right, scooping up a significant number of votes from those unhappy with the government's migration policy.
It is now the largest opposition group in the Bundestag, Germany's lower house of parliament.
But the party has also come under fire for fuelling anti-immigration sentiment amid several right-wing extremist attacks in Germany in recent months.
Support for the AfD has also dwindled with the spread of the coronavirus, with voters lurching towards Chancellor Angela Merkel's conservatives.
An opinion poll in late March showed the party on nine percent, two points down from the previous week and almost four down on its 2017 federal election performance.