By Tina Bellon

BERLIN (Reuters) - The German government will sharply raise its forecast for the number of asylum-seekers expected to arrive this year to a record-breaking 750,000, coalition sources said on Tuesday.

The increase, from a previous estimate of 450,000, is the latest sign of how a huge influx of migrants and refugees, many fleeing war and poverty in Africa and the Middle East, is straining the European Union's ability to cope.

"The situation is extremely unsatisfying," Chancellor Angela Merkel told ZDF television on Sunday, referring to the disproportionate number of refugees that Germany has taken in compared to many of its EU partners. "We need a common European asylum policy."

After Merkel warned that the number of refugees will be far higher than expected, sources in her coalition told Reuters that the asylum-seeker forecast would probably be formally raised on Wednesday to a range of 650,000-750,000.

Thomas Oppermann, parliamentary leader of the center-left Social Democrats, the junior coalition partner, said he expects 700,000 to 800,000 arrivals this year.

Migrant numbers across the EU have shot up during the summer months, overwhelming authorities from the Greek islands to the French port of Calais. Many undertake dangerous sea voyages to reach southern Europe, then make their way across the continent in the hope of reaching wealthier nations like Germany.

In Brussels, the European Union's border control agency said nearly 110,000 migrants were tracked entering the EU in July by irregular means, setting a record, with nearly 340,000 in all seen arriving in the EU so far this year.

Merkel has said other EU nations must do more, and tried to allay fears that migrants will cost taxpayers money and take their jobs. The number of attacks on migrant shelters has soared.

Across Germany, towns and cities have been saying they cannot cope with the surging numbers. Originally, the government predicted 300,000 this year, up from 200,000 in 2014.

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Germany is the biggest recipient of asylum-seekers in the EU, which has been overwhelmed by refugees fleeing war and poverty in countries such as Syria, Iraq and Eritrea.

There is also a flood of asylum-seekers from Balkan countries. Almost half of those who reached Germany in the first half of the year came from southeast Europe.

Along with a shortage of lodgings in cities including Berlin, Munich and Hamburg, Germany also struggles to process applications, which can take over a year.

On Tuesday, the finance ministry seconded 50 customs officials to the National Office for Migration and Refugees for six months to get through the backlog.

After Germany, Sweden is the next most generous recipient of asylum-seekers in Europe. In 2014, it recorded 81,200 applications and anti-immigration sentiment is on the rise.

U.N. High Commissioner for refugees Antonio Guterres told Germany's Die Welt daily: "In the long run it is not sustainable that only two EU countries -- Germany and Sweden -- with effective asylum structures accept the majority of refugees."

(Writing by Madeline Chambers and Erik Kirschbaum; Editing by Mark Trevelyan)