Chancellor Gerhard Schroeder's ruling Social Democratic Party suffered its most resounding defeat in a state election since World War II today as the opposition Christian Democrats consolidated their control over the eastern state of Saxony.

The clobbering at the polls was the Social Democrats' fifth consecutive electoral defeat this year, reflecting the depth of voter disenchantment with Schroeder's austerity program and his failure to ameliorate Germany's high unemployment rate since he was elected 11 months ago.

In contrast, the Christian Democrats rode the coattails of their popular state leader, Kurt Biedenkopf, to retain their absolute majority in the Saxon legislature with about 56 percent of the vote, according to incomplete returns. "King Kurt," a transplanted westerner, has won enthusiastic support for his efforts to rebuild Saxony as an oasis of high technology investment in the former East German states.

The Party of Democratic Socialism, the former Communist Party, surged past the Social Democrats to become the second strongest party in Saxony with 22 percent of the vote. Once derided as heirs of East Germany's totalitarian past, the former Communists have emerged as defenders of eastern interests and have capitalized on profound regional resentment toward what is seen as patronizing attitudes of western Germans.

The Social Democrats, who fell to third place with about 11 percent of the vote, have squandered the public's yearning for fresh and dynamic leadership that enabled Schroeder to oust his Christian Democratic predecessor, Helmut Kohl, after 16 years as chancellor.

Eastern voters helped boost Schroeder into the chancellor's job in last September's national election, but they have turned on him after seeing little improvement in a bleak employment picture in which as much as 20 percent of the Saxon labor force cannot find work.

Despite the electoral losses, Schroeder insists there is no alternative to pushing ahead with his plan to cut $16 billion from the budget because of debts that were largely accumulated during Kohl's administration.

Schroeder's strategy is based on the hope that the world's third-largest economy will benefit from a burst of growth over the next couple of years.

But his approach is controversial with members of his party. The bickering among Social Democrats over Schroeder's economic policies has fostered an image of disarray within his ruling coalition, which also includes the environmentalist Greens party.

The Greens have fared even worse than their partners. In the last four state elections, they have fallen below the 5 percent level required to qualify for seats in the legislature.

CAPTION: Christian Democratic members of the Saxon legislature celebrate in Dresden, the Saxon capital, as they watch television reports of their electoral victory.