Talks on forming a coalition government in Germany have collapsed, leaving Angela Merkel facing her biggest challenge in 12 years as chancellor.

The free-market liberal FDP pulled out after four weeks of talks with Mrs Merkel’s CDU/CSU bloc and the Greens.

FDP leader Christian Lindner said there was “no basis of trust” between them.

What happens next is unclear, but Mrs Merkel is due to meet President Frank-Walter Steinmeier, who has the power to call snap elections.

Her bloc won September’s poll, but many voters deserted the mainstream parties.

Mrs Merkel said she regretted the collapse of the talks, adding she would meet the German president later on Monday to formally tell him negotiations had failed.

“As chancellor, I will do everything to ensure that this country is well managed in the difficult weeks to come,” she said.

Aside from early elections, Mrs Merkel could also form a minority government with the Greens.

The second-largest party in parliament, the Social Democrats, have ruled out returning to a coalition government with Mrs Merkel.