But the Social Democrats extracted a high price for Schroeder's backing down: his party would get eight seats in the Cabinet, compared to six for Merkel's group, said the officials, who spoke on condition of anonymity. The deal must be approved by the parties and parliament.
The deal would end a three-week standoff that started when voters ousted Schroeder's seven-year government of Social Democrats and Greens, but failed to give a majority to Merkel's preferred center-right coalition. That forced the Social Democrats and her Christian Democrats to seek a power-sharing deal across the left-right divide.
Merkel forced him to drop his demand to be chancellor, saying that as head of the party with the largest number of seats the job belonged to her. But the price was high: the Social Democrats would walk away with eight top ministries: foreign, finance, justice, health, transport, environment and development.
