Chancellor Gerhard Schroeder and conservative leader Angela Merkel both stood firm on their respective demands to be the next German leader after a first round of talks Thursday aimed at breaking the country's election deadlock.

Schroeder's Social Democratic (SPD) chairman, Franz Muentefering, said his goal was "a government with Gerd Schroeder as chancellor."

Merkel told reporters her party had won the most votes and thus she had the right to be chancellor.

"We made clear that given the election result the Christian Democratic alliance (CDU/CSU) is responsible for setting up the government," said Merkel.

Despite the sharply differing views on who should lead Germany, both sides agreed to meet again in Berlin next Wednesday.

There has been speculation that the two parties will try to set up a grand coalition government to rule Germany.

But Merkel noted: "I cannot imagine that Herr Schroeder has any interest in being vice-chancellor."

Merkel earlier dampened prospects for another coalition option with her CDU/CSU and their Free Democratic (FDP) ally plus the Greens who currently rule with Schroeder.

"We fully agree it will be difficult," said Merkel after separate talks with the FDP, adding: "The differences in party programmes are enormous."

There has been speculation Merkel may try to win over the Greens since Sunday's inconclusive election in which neither CDU/CSU with the FDP nor Schroeder's Social Democratic (SPD)-Greens government won a majority.

Senior Greens members on Wednesday also expressed deep scepticism over creating what has been dubbed a "Jamaica coalition" given the official colours of the three parties match the Caribbean nation's black-yellow-red flag.

Earlier, the Chancellor's SPD denied a report it would seek to keep Schroeder in power by using a legal trick to split the CDU/CSU.

Muentefering vowed his party would not change a rule dating back to the 1960s under which Merkel's CDU/CSU is regarded as a single faction in parliament.

The CDU operates in 15 of Germany's 16 federal states while the CSU functions as its sister party in Bavaria state.

The chancellor insists he has the right to stay on as German leader by arguing the CDU and the CSU totally separate parties.

Source: China Daily