Germany's business-friendly Free Democrats (FDP) joined the Social Democrats (SPD) and Greens on Monday in approving a decision by party leaders to proceed with three-way coalition talks to form what they called "a government of the middle".
The FDP leadership and members of parliament voted in favour of the start to negotiations after initial exploratory talks that saw the three parties agree a roadmap. The Greens and centre-left SPD had already given their approval.
Party sources have said talks to form a "traffic light" alliance - named after the parties' red, yellow and green colours - could begin from Thursday, with the aim of swearing in a government by Christmas.
Such a three-way coalition - the first of its kind at a federal level - would oust the conservatives after 16 years in government under Chancellor Angela Merkel, who did not stand for re-election.
But FDP leader Christian Lindner said his party would ensure this would not herald a shift to the left. Instead, theirs would be a "government of the middle".
"We see opportunities but we also see challenges," said Lindner, adding that there were big differences between the parties and "a lot of tolerance" would be necessary.
The targeted alliance would be led by the SPD, which came first in last month's election, with the party's Olaf Scholz likely succeeding Merkel as chancellor.
Scholz is currently finance minister and vice-chancellor in the outgoing coalition between Merkel's conservatives and their junior partner, the SPD.
He and the leaders of the smaller Greens and FDP announced on Friday they aimed to move into formal coalition talks, publishing the roadmap of points on which they agreed and compromises they had already reached.
Among other measures, the parties agreed to bring forward an exit from coal-fired power, to avoid tax increases and to raise the minimum wage.
The Greens and FDP have kept open the option of turning to the conservatives should talks with the SPD stumble.
(Reporting by Alexander Ratz; Additional Reporting by Holger Hansen; Writing by Sarah Marsh; Editing by Alison Williams)
