German Social Democrats shake up leadership, focus on govt

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But expectations that she would take over with immediate effect on a caretaker basis until a party conference triggered resistance as it breached party procedure.

"She speaks the language of the party base and is therefore the right person to pitch the grand coalition", said Carsten Nickel, a Brussels-based analyst at Teneo Intelligence.

The SPD snatched the powerful finance, foreign and labour ministries, as well as the justice and environment portfolios, while Merkel's Bavarian allies the CSU took the interior ministry.

If the Social Democrats' members do not vote to back the coalition deal and Germany is forced to hold a new election, Merkel said she does not rule out again seeking another term as chancellor. News weekly Der Spiegel in a cover illustration showed a nude Merkel, with gleeful SPD figures running off with her clothes.

A German official said on Tuesday the country's new government would not change its Brexit stance after Merkel's conservatives and the Social Democrats reached a coalition deal last week.

"The transition to the post-Merkel era has begun", judged the Sueddeutsche Zeitung daily, which added that Merkel's power was waning and "a unsafe mood" was starting to spread within her CDU.

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"The Chancellor has understood", Bouffier told Bild newspaper.

Merkel denied that she has lost authority inside her own party, despite having faced some unrest within her conservative ranks over the coalition deal.

Losing the finance ministry was "painful", she conceded, but she stressed that the move was "acceptable", since the alternative would have been a breakdown in talks, and likely snap elections. She modified her image as a socialist rabble-rouser while serving in Merkel's cabinet over the past four years.

Contrary to Schulz, an outsider for many SPD members, Nahles is deeply entrenched in the party.

That leaves open who from within the SPD may take up that post. Both men may now watch the next government from the backbenches.

Kevin Kuehnert, who leads the SPD's youth wing and is campaigning for members to vote against another tie-up with Ms Merkel, welcomed the decision as he said it would enable the party to focus completely on the members' coalition ballot.

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