German parties seek coalition

Following inconclusive legislative elections, Christian Democratic Union leader Angela Merkel urged the Social Democrats to "accept that they are not the strongest group" in parliament and to enter talks on an alliance under her leadership.

But, within minutes, Social Democratic chairman Franz Muentefering said that his party would insist on Mr Schroeder remaining chancellor.

Ms Merkel said that, like Mr Schroeder, she would refuse to hold talks with the new Left Party - an alliance of the Party of Democratic Socialism with left-wing former Social Democrats who have been angered by the chancellor's attacks on the welfare state.

Mr Muentefering insisted that any link-up between his party and Ms Merkel's would be without her as chancellor.

"The message was clear - this country does not want Ms Merkel as chancellor," he said.

Sunday's election denied a majority both to Mr Schroeder's outgoing Social Democratic and Green coalition government and to Ms Merkel's preferred combination of her Christian Democrats and the pro-business Free Democrats.

Official results showed Ms Merkel's party and its Bavarian counterpart the Christian Social Union, winning 225 seats, three more than the Social Democrats.

The Free Democrats received 61, the Left Party 54 and the Greens 51.

The SPD share of the vote went down 4.2 percentage points to 34.3 per cent and the Greens lost 0.5 percentage points, finishing at 8.1 per cent.

The Christian Democrats also lost votes - their 35.2 per cent share was down 3.3 percentage points from the 2002 election.

The Free Democrats went up 2.4 percentage points to 9.8 per cent, but the largest gain was won by the Left Party, which was up 4.7 percentage points to 8.7 per cent.

"The venture was worthwhile," said Left Party co-leader Oskar Lafontaine, a former chairman of the Social Democrats who fell out bitterly with Mr Schroeder. "There is a strong left in the German parliament."

Mr Lafontaine's fellow co-leader Gregor Gysi noted that, even without forming a government, three parties - the Social Democrats, the Greens and the Left Party - would hold a "left majority" in parliament.

The far-right National Democratic Party quadrupled its support, gaining 1.6 per cent of the vote, but that was far short of the 5 per cent threshold to enter parliament.

A "grand coalition" of the two main parties appears a likely outcome.

If the new parliament cannot elect a chancellor in three attempts, President Horst Koehler could appoint a minority government led by the party with a simple majority.