BERLIN (Reuters) - Chancellor Angela Merkel's party suffered losses in German regional elections Sunday, a setback that could hurt her chances of forming the centre-right government she wants after next month's federal vote.
Merkel's conservatives hold a comfortable 12-15 point lead in national polls over their main rivals, the centre-left Social Democrats (SPD), and a weekend opinion survey showed 87 percent of Germans expect her to win a second term on September 27.
But her Christian Democrats (CDU) saw their support fall sharply in the final weeks of the 2002 and 2005 campaigns and the regional results Sunday may increase fears of another pre-election slump.
In the state of Saarland, on the French border, and in Thuringia, in the ex-communist east, CDU leaders who have ruled for a decade saw their support slump by more than 10 points compared to 2004 and both could be unseated by leftist coalitions.
"The Social Democrats now have the aura of a winner, something they will need for the coming weeks," said Karl-Rudolf Korte, a political scientist at Duisburg-Essen University. "It could mean a turning point in the election campaign."
The regional election results from three German states were not all negative for Merkel.
In a third vote in the eastern state of Saxony, her CDU looked poised to retain power, most likely in a coalition with the business-friendly Free Democrats (FDP) -- the same party she hopes to partner with after the federal vote.
Gains for the FDP in all three states were a silver lining for the conservatives and the lack of strong rises in support for the SPD will be a comfort.
But the risks Merkel faces in the final four weeks of the campaign have clearly risen.
POLICY AGENDA AT STAKE
Any erosion in support levels could endanger her hopes of forming a government with the FDP and might force her into another "grand coalition" with the SPD -- the awkward right-left partnership she has led since 2005.
That would prevent her from pushing through key aspects of her policy agenda, including cutting taxes and extending the lifespan of Germany's nuclear power plants.
In Saarland, a tiny state of 1 million tucked into Germany's western corner, the SPD looks well-positioned to take power in a three-way coalition with the far-left "Linke," or Left party, and the environmentalist Greens, in what would be the first partnership of the SPD and the Left in the west of the country.
In Thuringia, a similar leftist partnership could be in a position to oust Dieter Althaus, one of Merkel's top party allies in eastern Germany, if the SPD and Left can resolve stubborn differences over who would run the state government.
Althaus saw his popularity dip after he was found guilty of involuntary manslaughter for crashing into and killing a 41-year-old woman on a ski slope in Austria on New Year's day.
Merkel's SPD challenger in the national vote, Frank-Walter Steinmeier, hit back at his critics and vowed a tough fight in the final weeks of the campaign.
"I have heard many times in the last few weeks that the federal election is over. This evening shows that was wrong," he said to cheers from party colleagues in Berlin.
Still, Steinmeier faces a daunting challenge to narrow the popular Merkel's lead. Her conservatives are likely to seize on any cooperation between his party and the Left to warn voters of a dangerous "red wave."
The Left, led by fiery populist and former SPD leader Oskar Lafontaine, are direct descendants of former East Germany's ruling communist party, which built the Berlin Wall.