Germany's Green Party ended talks to explore coalition options with Angela Merkel's conservatives last night, increasing the likelihood of a "grand coalition" between her party and Chancellor Gerhard Schroeder's Social Democrats.
The Greens said they saw no basis for cooperation with a party they called "neo-liberal" and "anti-ecological" - effectively ending prospects for an alliance that has never existed before at the federal level.
Merkel said her Christian Democrats (CDU) would now focus on talks next Wednesday with Schroeder's centre-left SPD.
Germany's political parties are holding a series of exploratory talks to assess the viability of various coalition governments after the country's election on Sunday gave no major party a majority with its preferred partner.
Alliances between the Greens and the CDU have been tried at municipal level before but never in a state or national government and politicians on both sides were always sceptical about reaching a deal.
Greens party leaders Reinhard Buetikofer and Claudia Roth said the wide policy differences between the two sides had made it clear that coalitions which functioned at local level were not yet ready to be transferred to the national stage.
"We see no chance of recommending further exploratory talks to our party's executive," Buetikofer said.
With no party able to form a government, the tortuous coalition negotiations, which are expected to take several weeks at least and which some politicians have said could last until Christmas, have sparked fevered media interest and speculation.
Merkel and Schroeder met on Thursday for the first time since Sunday's election and agreed to continue talks next week.
They have divergent views on how to boost the country's sluggish economy and on foreign policy issues like Turkish membership in the European Union. But the main obstacle to an alliance remains the standoff between Schroeder and Merkel over who should lead Germany.
The Greens' rejection of overtures from the CDU underlines the complexity of the situation facing the parties, which have wide policy and personal differences but which are under heavy pressure to resolve a deadlock unprecedented in postwar Germany.
Sunday's election left the conservatives and their liberal Free Democrat (FDP) allies with a combined 45 percent of the vote, short of the 51.1 percent scored together by the SPD, the Greens and the Left Party, a party that includes ex-communists.
But the Left Party's pariah status - none of the other parties is willing to talk to it - means the differences between centre-left and centre-right must be overcome if new elections are to be avoided.
Friday's decision by the Greens makes a grand coalition the most likely outcome and greatly lessens prospects of a so-called "Jamaica coalition" with the FDP.
That option - named after the black, yellow and green colours of the three parties, which match the colours of the Jamaican flag - was already seen as unlikely given the wide differences between the Greens and the other two.
The FDP have also ruled out another possible variant - the so-called "traffic light" option linking SPD, FDP and Greens.
Merkel, speaking to reporters after the meeting with the Greens, said the talks had been conducted in a cordial atmosphere but that there was evidently no basis for further meetings, at least for the moment.
She said the door had not been permanently shut to further talks with the Greens at a later date.
"The option is definitely still open and we're just going to continue with the process," she said.