Germany was left in political limbo as the conservative opposition scraped to a narrow election victory over Chancellor Gerhard Schroeder's Social Democrats but crucially failed to win a governing majority.

First results released on public television on Sunday showed Angela Merkel's Christian Democrats on between 35.7 and 36.6 percent, only slightly ahead of the Social Democrats.

Her preferred coalition partners, the pro-business Free Democrats, tallied around 10.5 percent, prompting its supporters to erupt in jubilation at their party headquarters in Berlin.

The Greens, junior partners in the current government, reached 8.1 to 8.4 percent.

A new alliance of dissidents from the Social Democratic Party and former communists known as the Left Party garnered 7.7 to 8.1 percent, effectively robbing the mainstream parties of key support in an extremely close election.

The results mean that Merkel, who was widely tipped to win the election and become Germany's first woman chancellor, may be forced into an unwieldy grand coalition with the Social Democrats which she had earlier called a recipe for "gridlock".

The charismatic Schroeder has ruled out serving as a junior partner in such a government and is likely to retire from politics.

Far less likely is a left-wing coalition featuring the Social Democrats, the Greens and the Left Party, mainly due to the bad blood with the Left Party's chief candidate Oskar Lafontaine, a former SPD leader and finance minister who resigned.

Nearly 62 million Germans were called to the polls after Schroeder forced through the election 12 months ahead of schedule in a bid to obtain a fresh mandate to reform Europe's biggest economy.

Merkel, a 51-year-old former physicist, hammered home her message that only the Christian Democrats could drive down the crippling unemployment rate of 11.4 percent and get the stalled economy moving again.

Germany's European partners have long hoped for a strong economic recovery to help propel growth on the continent.

The race was hard-fought and remarkably bitter by German standards, with Merkel accusing the Social Democrats of dirty tricks and lies and Schroeder charging the conservatives of planning to dismantle the country's cherished social welfare system.

The Social Democrats had slashed the Christian Democrats' early lead in half in recent weeks and the charismatic Schroeder put in extra campaign speeches in a bid to sway undecided voters, reportedly about a quarter of the electorate just days before the poll.

But the results show Schroeder's risky bid to bring the election forward ultimately failed, just a week after Japanese Prime Minister Junichiro Koizumi spectacularly won the same gamble in that country's general election.

Merkel has proposed creating jobs and driving economic growth with a program of income tax cuts and labor market liberalization that would go beyond Schroeder's controversial economic reform package known as Agenda 2010.

On Sunday in conservative stronghold Munich, one of the organizers of the city's world-renowned Oktoberfest beer festival said he believed the country needed to undergo the potentially painful reforms Merkel is advocating.

"It is urgent that things get done, even if there is some apprehension about Merkel because she lacks experience," Heinrich Krebs told AFP.

In Berlin, some voters said they wanted to give the charismatic chancellor one more chance.

"I am going to vote for the Social Democrats again because I think they had too little time to implement reforms. We should give them a chance to carry on," said Juliane Fischer, a 28-year-old nurse, voting in the working-class district of Hellersdorf.

Despite sunny weather across the country, voter turnout six hours after the polls opened was slightly lower than at the same stage at the last general election in 2002.

Turnout was 41.9 percent at 2:00 pm six hours after polling stations opened, compared with 42.8 percent in 2002.

© Copyright 2005 AFP

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