The ministry confirmed a report due to appear in Tuesday's Handelsblatt newspaper saying that China would not impose tariffs on the polysilicon, which would have hurt German firms that export the material to Chinese solar power panel makers.

The newspaper said the German government had been working hard to reduce tensions between the EU and China following the decision by the European Commission, the EU's executive arm, to impose duties on Chinese solar panel imports.

The European Union and China are moving towards a deal to defuse a conflict over alleged dumping of solar panels in Europe, officials from both sides said last week, aiming to head off a damaging trade war in goods from steel to wine.

The European Commission accuses China of flooding Europe with billions of euros of cheap solar panels sold at below the cost of production, and has imposed duties that will jump up to punitive levels in August.

Punitive tariffs have the potential to affect 21 billion euros (18.04 billion pounds) of imported Chinese solar panels, cells and wafers from manufacturers such as Trina Solar (>> Trina Solar Limited (ADR)), Yingli Green Energy (>> Yingli Green Energy Hold. Co. Ltd. (ADR)) and Suntech Power Holdings (>> Suntech Power Holdings Co., Ltd. (ADR)).

(Reporting By Markus Wacket; writing by Erik Kirschbaum)