German Chancellor Angela Merkel to step down as party leader

Merkel had earlier informed her centre-right Christian Democrats (CDU) that she would not stand again to be the party chairman at a congress in December to make way for new leadership.

Volker Bouffier, the incumbent CDU state premier in Hesse and a Merkel ally, said his party had achieved its goal of being able to lead the next government in Hesse, but added: "We are in pain because of the losses".

That marked a huge drop from the 38.3 percent the CDU won at the last Hesse election, in 2013.

In Bavarian elections on October 15, Merkel's coalition partner the CSU lost its majority in the regional parliament for the first time since 1957.

The embattled leader of the SDP, Andrea Nahles, has given Merkel an ultimatum to produce the kind of policy results within a year that would start bringing back voters, threatening otherwise to end the alliance.

She told a closed Christian Democratic Union (CDU) leadership meeting on Monday morning that she would not run as its chair in December, Deutsche Welle and Bloomberg reported.

Angela Merkel's ruling coalition suffered heavy losses for the second time in as many weeks in a German state election that is likely to have national repercussions.

Projections for ARD and ZDF public television, based on exit polls and partial counting, gave the CDU 27-28 per cent support and the centre-left Social Democrats almost 20 per cent.

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Stepping down as CDU chairwoman further undermines Merkel's authority, which has been dented this year by the two regional election setbacks and a close ally losing his role as leader of her conservatives' parliamentary group.

"Today it is time to begin a new chapter", she told reporters at her party headquarters.

"We went into the government because we really want to improve things - for families, for single parents, for caregivers", said Lars Klingbeil, the party's general secretary.

She is understood to have said she intends to continue as Chancellor until 2021 when her current term finished. Her fourth-term government took office only in March but has become notorious for squabbling.

Merkel has dragged the CDU to the political center in her years as leader, dropping military conscription, introducing benefits encouraging fathers to look after their young children, and abruptly accelerating the shutdown of Germany's nuclear power plants following Japan's Fukushima disaster in 2011.

The result means the anti-immigration party, which entered the federal parliament for the first time a year ago, is now also represented in all 16 German regional assemblies.

Ms Merkel's coalition was twice on the brink of collapse, once over immigration policy and then over a dispute about the fate of the domestic intelligence chief who was accused of harbouring far-right views.

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