Chancellor Angela Merkel’s conservatives, the pro-business Free Democrats (FDP) and the environmentalist Greens decided to halt the talks for several hours after failing to make progress during what was to have been the final evening of the talks.
The mood had soured noticeably late on Thursday, with parties breaking off to huddle in their respective groups and party officials blaming each other.
Green negotiator and premier of the state of Baden-Wuerttemberg, Winfried Kretschmann, said: “We’ll continue at noon today.”
A Thursday deadline was initially set to secure a provisional deal allowing the German Chancellor to form a three-way partnership with the FDP and Greens.
Mrs Merkel has been locked in talks with the parties for six weeks following her party’s worst election result since 1949.
A breakdown of the talks could mean fresh elections in Germany since the Social Democrats (SPD) – the second biggest party – have made clear they have no appetite for joining another “grand coalition”.
More to follow…