Chancellor Gerhard Schroeder and his conservative challenger Edmund Stoiber are running neck-and-neck in one of Germany' closest post-war elections.
Projections by three polling agencies combining exit polls and early returns showed a slight lead for two Christian Democratic parties led by Stoiber, with about 39 per cent to about 38 per cent for Schroeder's Social Democrats.
The Greens, in coalition with the Social Democrats for the last four years, are polling at about 9 per cent - which could be decisive in helping Schroeder stay in power.
Early returns showed the liberal Free Democrats, Stoiber's likely coalition partner, polling at 7 per cent.
According to ZDF public television, the Social Democrats and Greens will win 300 seats to 297 for the Christian Democrats with their likely coalition partner, the liberal Free Democrats.
Similarly, n-tv private television, using projections from the Forsa polling agency, gave 301 seats to a Social Democratic-Green coalition and 297 seats to the challengers.
However, another public TV station, ARD, projected the seat distribution at 302 for Stoiber's likely coalition and 296 for Schroeder's.
"One thing is already clear: We have won the election," said a jubilant Stoiber at his campaign headquarters.
"The CDU, the great party of the centre, is back. It is the biggest party in parliament. We will make what we can of this great result."
Voter turnout is running slightly behind 1998, with official figures showing 42.8 per cent of the more than 61 million voters casting ballots, compared to 47 per cent at the same time four years ago.
PA