Schroeder hints at stepping down

This is the first time Schroeder suggests he might step aside

German Chancellor Gerhard Schroeder has for the first time since last month's election hinted he might abandon his claim to lead the next government.

Speaking on German television, he said he would not stand in the way of a stable government being formed.

"This is not about my prerogatives and not about me as a person," Mr Schroeder said, adding he would accept any decision by his party leaders.

But the Social Democrats (SPD) insist they want him to remain chancellor.

The demand was re-iterated on Monday by SPD chairman Franz Muenterfering.

However, he added that the leadership question was a matter for negotiations once formal coalition talks begin.

A delayed vote in the eastern city of Dresden on Sunday was won by Angela Merkel's Christian Democrats (CDU), boosting her claims to succeed Mr Schroeder.

Commenting on the vote, Ms Merkel said she was "counting on the sensible forces in the SPD so that things take a sensible course".

A third round of talks between the two major parties is due to start on Wednesday.

But Ms Merkel does not want to start formal negotiations on a so-called "grand coalition" including Germany's two main parties, unless the SPD acknowledges her right to become chancellor.

After the Dresden vote, the CDU and its Bavarian sister party, the CSU, have 226 seats in the new parliament, while the SPD has 222.