Opposition's state win a setback for Merkel Germany's centre-left opposition won a wafer-thin victory over Chancellor Angela Merkel's coalition in a major state election Sunday, dealing a setback as she seeks a third term at the helm of Europe's biggest economy later this year. The opposition Social Democrats and Greens won a single-seat majority in the state legislature in Lower Saxony, ousting the coalition of Ms. Merkel's conservative Christian Democratic Union and the pro-market Free Democrats that has run the northwestern region for 10 years. The same parties form the national government. The 58-year-old Ms. Merkel will seek another four-year term in a national parliamentary election expected in September. She and her party are riding high in national polls, but the opposition hoped the Lower Saxony vote would show she is vulnerable. The outcome could boost what so far has been a sputtering campaign by Ms. Merkel's Social Democratic challenger, Peer Steinbrueck. "This evening gives us real tailwind for the national election," said Katrin Goering-Eckardt, a leader of Steinbrueck's allies, the Greens. We can and will manage to replace the [centre-right] coalition. However, the close outcome also underscores the possibility of a messy result in September, with no clear winner. Before Sunday's election, the main question had been whether the Free Democrats, whose support has eroded badly since they joined Ms. Merkel's national government in 2009, would win the 5 per cent needed to gain seats in the state legislature. Polls over recent months had suggested that they might not. The Free Democrats won 9.9 per cent of the vote, thanks to tactical voting by supporters of Ms. Merkel's conservatives. Many chose the smaller party so that the coalition's "good policies for solid budgets, safe jobs and good education could be continued," said the general secretary of Merkel's party, Hermann Groehe. Despite the popularity of David McAllister, the state's CDU governor, that helped push down the conservatives" support to 36 per cent from 42.5 per cent in Lower Saxony's last election in 2008. They finished as the biggest single party but fell short of expectations. The combination of the CDU and Free Democrats has now lost control of four states since the smaller party joined Merkel's government in 2009. At national level, the alliance has developed a poor image, with the Free Democrats taking much of the blame for frequent government infighting. Merkel and her party, meanwhile, have been bolstered by a relatively robust economy, low unemployment and the chancellor's hard-nosed handling of Europe's debt crisis. Sunday's vote may calm intense recent speculation over whether the Free Democrats will force out their embattled leader, Vice Chancellor Philipp Roesler, whose home state is Lower Saxony. Roesler proclaimed Sunday "a great day" for his party. Merkel also has profited so far from stumbles by Steinbrueck, a former finance minister who drew criticism in recent weeks for saying that the chancellor earns too little - adding to the controversy over his own high earnings from speeches. His party improved a little on its feeble performance five years ago in Lower Saxony, polling 32.6 per cent. Its allies, the Greens, made bigger gains, to 13.7 per cent. That gave them 49 and 20 seats, respectively, in the state legislature in Hannover; the CDU took 54 and the Free Democrats 14. Opposition leaders argued that their overall gains and the losses for the centre-right showed that a change to a centre-left government is possible in Berlin, despite unpromising recent polls. Steinbrueck conceded that his recent troubles hadn't helped, though. "I am well aware that there was no tailwind from Berlin, and I am also aware that I bear a certain share of responsibility for that," he told supporters. He said he felt "a certain amount of relief" at the result. Two parties that have drained support from the centre-left over recent years, the Left Party and the Pirate Party, failed to get enough votes Sunday to enter Lower Saxony's legislature.