Germany slid into political chaos on Sunday night as the election produced a hung parliament, with both chancellor Gerhard Schröder and his challenger Angela Merkel claiming victory and the right to form a new government.

The result is unprecedented in German post-war history and caused bafflement in Berlin as Ms Merkel, who seemed set for an easy win just weeks ago, was left claiming a pyrrhic victory after an uninspiring and gaffe-ridden campaign.