A German family-owned business association prompted shock in the country's business community after dropping its ban on contacts with the far-right Alternative for Germany (AfD).

The decision, announced on Tuesday, has been roundly criticized by trade organizations and institutes.

The anti-immigrant AfD, Germany's largest opposition party, is under investigation by domestic intelligence services over its extremist views.

All other major parties have refused to work with the AfD in a policy known as the "firewall."

Michael Hüther, director of the German Economic Institute, told the Handelsblatt newspaper that there are "a number of clear economic reasons against the AfD," which he said has "become increasingly radicalized."

Bitkom, Germany's association for the digital economy association, said the party is "backward-looking in terms of digital policy" and "questions the democratic constitutional state."

The group does not offer AfD politicians a platform at events and digital conferences and said "there are no plans to change this fundamental policy."

The comments came after the Family Business Association's president Marie-Christine Ostermann, told the Handelsblatt newspaper that the "contact ban" on AfD politicians was lifted in an October meeting.

AfD representatives were invited to the meeting, which was held at a Deutsche Bank branch in Berlin.

In response, Deutsche Bank told dpa that the organization will not be allowed to hold further events at its facilities.

AfD spokesman Daniel Tapp said party co-leader Alice Weidel has been "in regular contact with small and medium-sized enterprises" behind closed doors since 2017.

Weidel welcomed the group's decision, Tapp said. "We expect this decision to trigger a further easing of the relationship between various companies and the AfD."