Around 50 founding members took part at the first formal party meeting on Thursday.
Stadtkewitz whose new party plans to run in regional and national elections, was voted
as the new party chairman.
The Berlin state legislator is a close ally of Dutch Islamophobic politician Geert Wilders as both are hoping to widen their anti-Muslim hate campaign throughout Europe.
The German Islamophobic politician has also actively campaigned against plans for
building mosques in Berlin.
Germany's 4.3 million Muslims are alarmed over an Islamophobic wave stirred by Merkel's CDU and its sister party, the Christian Social Union (CSU) in recent weeks.
German Justice Minister Sabine Leutheusser-Schnarrenberger admitted last month that Islamophobia had in fact become a serious problem in the country as a result of deepening popular anti-Muslim sentiments.
Leutheusser-Schnarrenberger said there was a growing tendency among the public to view 'Muslims and their religion as a threat.'
This was the first time that the German government had openly acknowledged the existence of Islamophobia.
German Muslim leaders have repeatedly urged the Merkel government to take the problem of Islamophobia seriously.
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