The way was finally cleared for Angela Merkel to form a new government in Germany on Sunday as the centre-Left Social Democratic Party (SPD) voted in favour of a coalition deal.

A postal vote of the SPD’s 463,000 members voted to keep Mrs Merkel in power by a healthy margin, with 66 per cent in favour and only 34 per cent against.

The decision brings an end to months of political crisis in Germany. The vote was the last hurdle standing in Mrs Merkel’s way, and she will now be able to defy her critics and begin a fourth term as chancellor.

“We now have clarity,” the acting SPD leader, Olaf Scholz, said. “The SPD will enter the government.” Mr Scholz is expected to become finance minister and vice-chancellor in the new government.

“Now to work,” tweeted Peter Altmaier of Mrs Merkel’s Christian Democrat party (CDU), who is set to become economy minister.