Berlin - German carrier Lufthansa faced a possible all-out strike at the height of the holiday season after wage talks with the large Verdi services sector union broke down Thursday.

The two sides restarted talks in Frankfurt early Thursday amid growing signs that their positions were far apart, but a Lufthansa spokesman said at midday that the talks had collapsed.

Lufthansa, Germany's largest carrier, had offered 50,000 ground and cabin staff a two-stage pay increase of 6.7 per cent over 21 months to the end of February 2010.

Verdi demanded close to 10 per cent over a 12-month contract.

The union, Germany's second largest with some 2.2 million members, has threatened to ballot workers on an all-out unlimited strike. (dpa)