Social Democrats agree to join chancellor's Union bloc in government, though party members must vote on plan first

Chancellor Angela Merkel's conservatives and Germany's main centre-left party have reached an overnight deal to form a new government, more than two months after the country's elections.

Negotiators from Merkel's Union bloc and the Social Democrats concluded their agreement to form a "grand coalition" of Germany's biggest parties after a final all-night round of talks.

A hurdle remains before Merkel can be sworn in for a third term: the Social Democrats are putting the agreement to a ballot of their roughly 470,000 members, some of whom are deeply sceptical about becoming the chancellor's junior partner. The result is expected in mid-December.

Merkel won the election on 22 September but her partners in Germany's centre-rightgovernment of the past four years, the pro-business Free Democrats, lost all their seats in parliament and her conservatives fell short of a majority to govern alone. That left her reaching across the aisle for a new coalition partner.

The Social Democrats secured key demands such as the introduction of a mandatory national minimum wage, which Germany is unusual among rich industrial powers in lacking. The €8.50 hourly minimum is to be introduced in 2015 but Julia Kloeckner, a deputy leader of Merkel's party, said it would not apply to everyone without exception until the beginning of 2017.

In addition people born and educated in Germany who also hold a passport from a non-European Union country will no longer be obliged to choose one citizenship, a change that will apply