The results from the Berlin state election has raised more doubts about whether Europe's most powerful leader will stand for a fourth term.
German Chancellor Angela Merkel's Christian Democratic Party (CDU) secured around 18 per cent of the vote - a drop from the 23.3 per cent it took in the city's 2011 election.
The CDU's regional coalition partner, the Social Democrats, have also taken a hit. Their support fell from 28.3 per cent to 22.4 per cent, signalling the end of their alliance.
"The voters have taught the grand coalition a significant lesson," said CDU candidate Frank Henkel.
"Both parties have clearly lost compared to 2011. We don't have to beat around the bush. For us, the CDU, this result is absolutely unsatisfactory."
The CDU's worst result in more than 25 years has been partially blamed on Berlin's inefficient bureaucracy. But it also appears to reflect growing discontent surrounding Ms Merkel's open-door policy for refugees.
"The CDU didn't succeed in bringing their content across in a way that more than 18 per cent of people would have voted for us," said CDU young unionist Christoph Brzezinski. "We surely have to talk about why this didn't work out.
Since no party won an outright majority, the Social Democrats are expected to form a new coalition government with the Left Party, which came third in the vote, and the Greens.
But it's vowed not to work with the populist Alternative for Germany (AfD) party, which played heavily to voters' fears about the influx of migrants. Around one million people fleeing Middle East war zones entered Germany last year, raising concerns about their financial and social impact.
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During his campaign, Berlin Mayor and Social Democrat Michael Mueller compared a strong AfD result to a resurgence of Nazism in Germany.
"I've been asked how we're going to deal with [the AfD], sitting in the state assembly with a double-digit result," he told supporters.
"And I have said there is no change to our current position. There will not be any kind of cooperation with the AfD on a regional or state level."
AfD succeeds
By securing nearly 14 per cent of the vote, the AfD has easily entered its 10th regional assembly of the country's 16 states. The party's State chairman, Georg Pazderski, has since set his sights on next year's federal election.
"My dear friends, what we've achieved tonight is unique for Berlin," he said in his victory speech. "From zero to double-digits... that didn't happen here for 66 years.
"The grand coalition has been voted out - not yet at the federal level, but that will happen next year."
The result comes two weeks after the AfD finished ahead of the CDU in another state vote.
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