BERLIN, March 3 (Reuters) - The prospect of an unprecedented post-war military spending boom by Germany sent Europe's defence socks soaring on Monday after Reuters reported the likely next government was mulling a fiscal sea change for Europe's biggest economy.

Defence contractors including Thyssenkrupp TKAG.DE, Hensoldt HAGG.DE, Renk R3NK.DE, Rheinmetall RHMG.DE, BAE Systems BAES.L and Leonardo LDOF.MI saw their shares jump by double-digit percentages on news that the election-winning conservatives and the centre-left Social Democrats were contemplating debt-financed defence and infrastructure funds jointly worth just under a trillion euros.

Neither party has officially confirmed that a special fund for defence worth 400 billion euros ($417 billion) and for infrastructure worth as much as 500 billion euros were under discussion, a sum which combined would amount to 20% of German GDP.

"Even if spent over 10 years, this would be about as much as the country has invested in East Germany since reunification," Deutsche Bank wrote in a note. "It would be a fiscal regime shift of historic proportions."

The discussions are the latest fall-out from the United States' cooling attitude towards backstopping Europe's defence since President Donald Trump returned to the White House, of which Friday's clash between Trump and Ukrainian President Volodymyr Zelenskiy was the most dramatic illustration.

In a sign of the urgency, the funds could be approved by the current parliament, in which the Greens have enough seats to complete the needed two-thirds majority. In the newly parliament that will be seated later this month, the defence-sceptical Left party's consent would also be needed.

For decades, Germany has been a defence laggard, until 2023 spending less than NATO's target of 2% of economic output on defence, with Russia's invasion of Ukraine and Chancellor Olaf Scholz's defence "Zeitenwende" or sea change only bringing modest results.

The use of a special fund - effectively a credit line - reflects the difficulties in circumventing a constitutional spending cap that limits the amount of new debt German governments can take on each year.

The soaring shares reflect investor confidence that the makers of military vehicles, ammunition and other battlefield kit will be big winners from the bonanza.

Scholz's previous attempts to boost military spending also relied on a special fund, formally separate from Germany's 2 trillion euros in public spending.

They are legally tricky: a court ruling against his use of another fund paved the way for the collapse of his government and the election he lost last month.

The economic impact of the defence fund would be modest in the short term, Deutsche Bank wrote, since much of it would be spent on imports.

The infrastructure fund, badly needed after years of frugality have left much of Germany's public realm, from bridges to railways, in a ragged state, would have a much more serious economic impact.

"Assuming they were spent and smoothed over 10 years, the fiscal impulse would be worth up to 2% of GDP," Deutsche Bank wrote.

Both the conservatives and the SPD have expressed openness to reforming the debt brake, increasingly seen as a brake on growth, but any reform would need a two-thirds parliamentary majority and the assent of the Greens and Left parties - both of whom would likely want to extract quid pro quos.

($1 = 0.9602 euros)

(Reporting by Thomas Escritt, Editing by Friederike Heine and Angus MacSwan
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((thomas.escritt@thomsonreuters.com; +49 30 2201 33579; @tomescritt;))