Germany's Schroeder hints he may stand down

Chancellor Gerhard Schroeder of Germany today signalled he may be ready to relinquish power two weeks after Germany's most inconclusive post-war election.

For the first time since his Social Democrats (SPD) finished second to Angela Merkel's conservatives in the September 18th election that produced a hung parliament, Mr Schroeder said he would not stand in the way if a stable government could be formed by the two main parties.

The Christian Democrats and their Bavarian sister party, the Christian Social Union, won 226 parliament seats to 222 for the SPD, leaving each side and its allies short of a majority. The two rivals have been edging towards a "grand coalition".

Mr Schroeder said today that he was fighting to stay in the chancellery on behalf of the SPD and its centre-left policies - and not for his own personal ambitions.

"It is not about my claim and definitely not about me," Mr Schroeder told RTL television.

"It is about the political leadership claim of my party and that can only be decided by the party's executive. I will accept every decision that it makes. I will not stand in the way of anything that would lead to a continuation of the reform processes that I started, and a stable government in Germany."

Mr Schroeder vowed on September 18th he would not let his party join any government led by Ms Merkel, whose party suffered a steep fall in the final week of the campaign but finished just ahead of the SPD.

However, his remarks before an SPD executive meeting in Berlin today appeared to confirm speculation that the SPD was using Mr Schroeder as a bargaining chip to gain leverage with the CDU in a battle over policies, ministries and parliament posts.

SPD chairman Franz Muentefering earlier signalled a readiness to compromise with the CDU over the leadership issue. He said the SPD still wanted Mr Schroeder to lead a "grand coalition" but said the demand was negotiable.

"We are in favour of Gerhard Schroeder as chancellor but this will be discussed as part of the entire package in negotiations," Mr Muentefering said after the CDU picked up one more seat in a late-voting district in Dresden yesterday.

Asked if he were sure that Mr Schroeder would stay chancellor, Mr Muentefering added: "At the moment that's not been clarified." Analysts saw this as a sign the SPD was ready for a deal.