Berlin - Christian Democrat (CDU) Chancellor Angela Merkel pledged continued cooperation with the Social Democrats (SPD) in her grand coalition government Monday, after the SPD named Foreign Minister Frank-Walter Steinmeier to challenge her in German elections next year.

Merkel criticized the weekend manoeuvring in her junior coalition partner that saw the popular Steinmeier named as the SPD candidate for the chancellorship and Kurt Beck ousted as party chairman.

The machinations within the SPD were "unworthy" of a broad-church German party and indicated "deep division," Merkel said, following the unexpected shake-up in the SPD hierarchy on Sunday.

Government spokesman Thomas Steg said Merkel and Steinmeier, who also holds the office of deputy chancellor, aimed to focus on the business in hand "until far into next year."

But political commentators said cooperation within the unwieldy coalition would become increasingly difficult in the months leading up to the elections, provisionally set for September 27 next year.

And the chairman of the minority opposition liberal FDP, Guido Westerwelle, called for early elections. "Germany cannot afford a full year of electioneering between the chancellor and the deputy chancellor," he said.

Ronald Pofalla, general secretary of Merkel's CDU, called on Steinmeier to make clear the SPD's position on pro-market reforms and on its relations with the socialist Left Party, which has eaten into the SPD support base in recent months.

Steinmeier was named the SPD's top candidate in next year's elections at a closed meeting of around 50 top SPD leaders near Berlin on Sunday.

The announcement had been widely anticipated, but Beck's decision to resign as party chairman in favour of veteran SPD campaigner Franz Muentefering shook the German political landscape.

Beck, premier of the western state of Rhineland-Palatinate, accused others in the party of undermining his position and refused to continue in the post amid low ratings in the opinion polls, both for him personally and for the SPD.

SPD leaders met Monday to chart the way ahead. The party is required to call an extraordinary general meeting to vote Muentefering in as party chairman.

It also needs to resolve bitter internal divisions over its relations with the Left.

In the state of Hesse, local SPD leader Andrea Ypsilanti is seeking an arrangement with the socialists that would propel her to the premiership following inconclusive elections in January in a move seen as hurting the party nationally.

A recent national opinion poll gave Merkel's CDU/CSU bloc 36 per cent to 26 per cent for the SPD. The Left was on 13, the FDP on 11 and the Greens on 10 per cent. (dpa)