Reuters. A bitter defeat for Merkel months before German election

In an extremely tight German state election that seemed to produce few clearcut winners, there was no argument over who the biggest loser was Chancellor Angela Merkel.

Her Christian Democrats (CDU), led by rising star David McAllister, had convinced themselves over the past week that they were on the verge of a stunning come-from-behind victory in Lower Saxony, a major agricultural and industrial region that is Germany's closest approximation to a swing state.

But on Sunday, they came up agonizingly short, losing power to the centre-left Social Democrats (SPD) and Greens, who together garnered just one more seat in the state assembly than the centre-right.

The defeat is a bitter one for Merkel, even if she remains a strong favorite to win a third term in a federal election eight months from now.

There will be much hand-wringing in the CDU about McAllister's not-so-subtle hints to supporters in the weeks before the election that they use their votes to boost the score of the FDP.

His message resonated with CDU voters, but perhaps stronger than he would have liked.

The FDP, which had been expected to struggle to make the 5 percent threshold needed to enter the state assembly, ended up with a surprisingly strong score of 9.9 percent, largely thanks to CDU backers who split their two votes (in German elections voters cast ballots for both a party and a local candidate).

Yet the FDP's strong showing appears to have come at the expense of McAllister's CDU, which scored 36 percent, down 6.5 points from their last result in Lower Saxony in 2008 and well below the 40 percent-plus that opinion polls had forecast.

nstead it highlighted the problems of their own chancellor candidate Peer Steinbrueck, who on Sunday accepted responsibility for weakening the party's score in Lower Saxony with a series of verbal blunders.

Just as with Roesler in the FDP, the result is unlikely to quiet voices within the SPD who have begun questioning Steinbrueck's suitability as a challenger to Merkel.

The only party that came out an undisputed winner from Lower Saxony was the Greens, who with 13.7 percent of the vote scored their best ever result in the state. But without a stronger performance from the SPD, their natural allies, the environmentalist party has little hope of dislodging Merkel as they did McAllister.