German Social Democrat premier Hannelore Kraft celebrates with supporters in the German state of North Rhine-Westphalia.

German Social Democrat premier Hannelore Kraft celebrates with supporters in the German state of North Rhine-Westphalia. Photo: GETTY/Johannes Simon

The German Chancellor, Angela Merkel, has suffered a significant blow after voters in Germany's biggest state decisively rejected her austerity policies in a defeat that will weaken her on the European stage.

The German Chancellor had hoped to evict a Social Democrat-Green coalition in the state of North Rhine-Westphalia but the region's 13 million voters decided otherwise.

According to exit polls, the Social Democrats won 39 per cent of the vote, enough to form a stable majority with the Greens, who scored 12 per cent. Dr Merkel's Christian Democrats saw their support plunge to just 26 per cent, down from nearly 35 per cent in 2010 and the worst result in the state since the Second World War.

The Christian Democrat Norbert Roettgen concedes defeat.

The Christian Democrat Norbert Roettgen concedes defeat. Photo: AFP/Maurizio Gambarini

The crushing defeat follows elections that rejected austerity policies in Greece, France and Italy, severely weakening Chancellor Merkel's hand at her first talks with Francois Hollande, the new French President, in Berlin tomorrow.

In a contest that mirrored the debate in the eurozone between "growth" and austerity, she presented the vote as a battle between "thrifty" Christian Democrats and "ever more debt" run up by the left.

The strongly working-class North Rhine Westphalia backed a popular Social Democratic premier, Hannelore Kraft, who shares many of Merkel's characteristics: a woman in a male-dominated profession, pragmatic and credible to ordinary voters.

The Social Democrat Premier of North Rhine Westphalia, Hannelore Kraft.

The Social Democrat Premier of North Rhine Westphalia, Hannelore Kraft. Photo: AFP/Michael Kappeler

Ms Kraft took over as premier two years ago and has ruled with Green Party help.

Despite lacking a parliamentary majority, Ms Kraft persuaded parliamentary opponents to help her pass legislation case by case. Ultimately, she failed to win backing for her budget, so she called a snap election.

She confirmed on Sunday that some Social Democrats had been pressing her to run for chancellor.

"It's flattering," she said in a TV interview. "But my job is here."

The rejection of Dr Merkel's austerity economics at home will strengthen President Hollande's demand that the fiscal pact reached by all EU states with the exception of Britain and the Czech Republic should be redrafted to allow more room for higher spending centre-left policies.

The Berlin meeting, taking place just hours after the Paris inauguration of France's first Socialist president for two decades, will be tense as Mr Hollande demands a rethink of policies associated with Dr Merkel and Germany.

Benoit Hamon, the French Socialist Party spokesman, yesterday directly challenged the German Chancellor's authority to lead the eurozone.

"We didn't vote for an EU president called Mrs Merkel who makes sovereign decisions for the rest of us," he said. "We want to renegotiate this pact. Austerity led Greece into failure."

North Rhine-Westphalia is Germany's most populous state, with a large share of the country's economy, and has a history of setting trends in national politics.

Norbert Roettgen, Germany's environment minister and a protege of Mrs Merkel nicknamed "Mummy's brightest", fought a clumsy campaign in the state using an inflatable "debt mountain" to emphasise the fiscal irresponsibility of the Social Democrats.

Mr Roettgen resigned his state CDU chairmanship, minutes after the polls closed, taking personal responsibility for the defeat.

Telegraph, London; Deutsche Press-Agentur