German parties rule out deal to end deadlock

Still smarting from their unexpectedly poor election result, Angela Merkel's conservative Christian Democrats prepared for negotiations today with Chancellor Gerhard Schröder's Social Democrats over the possibility of forming a grand coalition government.

But the talks seem destined to fail. The Social Democrats refused to back down from their insistence that Mr Schröder should remain chancellor in a grand coalition while Mrs Merkel remained equally adamant that she should be given the job.

"[Schröder] will not succeed in forcing us to give up our right to lead the next government," Ms Merkel said.

The conservatives and the Greens are due to hold a round of coalition talks tomorrow, and leading Christian Democrats publicly have backed the talks saying it would be preferable to a grand coalition with Chancellor Schröder's Social Democrats. "There is more to be said for an alliance with the liberals and the Greens than a coalition with the SPD," said Wolfgang Schäuble, the CDU's chief foreign policy spokesman. "If we can find some form of common ground let's try it with the Greens. We have all got to come out of the trenches and make compromises."

But the Greens, who appear to have been thrown into disarray by the decision on Tuesday of their colleague, Joschka Fischer, the Foreign Minister, to retire to the back benches, dug in their heels and appeared to reject the idea of any deal with the conservatives and liberals.

Reinhard Bütikofer, the Greens' party leader, pointed to the serious policy differences between his party and the conservatives on nuclear power, Turkish membership of the EU and health.

"There is a long chain of diametrically opposed positions," he said. "As Greens we are certainly not going to become the auxiliary engine that helps neoliberal and neoconservative politics into the chancellor's office," he added.

Ms Merkel's attempts to win over the Greens were further undermined by the conservatives' Bavarian sister party, the Christian Social Union, which said it remained sceptical about the idea.

At the same time, Chancellor Schröder's Social Democrats started an uphill battle to win over the small but influential liberal Free Democratic Party as partners to join them in a so-called "traffic light" coalition government with the Greens. Otto Schily, the SPD Interior Minister, urged the liberals to drop their outright opposition to a "traffic light" alliance. "Much of our agenda fits the liberals much more than the conservatives. The FDP's position is premature," he said.

The liberals, who have categorically ruled out any coalition with the Greens and Mr Schröder's party, refused even to respond to the SPD's bidding yesterday.

The Greens dampened the SPD's hopes even further by saying that they had "major reservations" about joining forces with the FDP.

The prospect of neither the conservatives nor the Social Democrats being able to form a new government by the time parliament reconvenes in mid-October, has thown the spotlight back on to the only other way out of Germany's current political paralysis - a minority government headed either by Ms Merkel or Mr Schröder.

In these circumstances, the choice of chancellor would be subject to a parliamentary vote likely to be swung either way by the 54 radical Left Party MPs headed by "Red" Oskar Lafontaine the former SPD finance minister.

Four Left Party MPs abandoned the party's official line of no support for either candidate and said yesterday that they would vote for Mr Schröder if his party agreed to scale down its programme of social security and unemployment benefit cuts and raise taxes for the wealthy.

"If the SPD says it wants Schröder and it agrees to our conditions then we will vote for him," said Huseyin-Kenan Aydin, one of the four.