All smiles (and a cruel barb) from the loser

BERLIN - The body language said it all.

German Chancellor Gerhard Schroeder cheered his party's narrow second place in the election like a prize fighter, arms clasped above his head.

His conservative challenger, Angela Merkel, first in seats but far short of a majority, could barely force a smile at a technical victory that made her the big loser.

A gasp of disbelief swept through her Christian Democrat headquarters as party faithful saw projections that they had polled only around 35 per cent - a whisker ahead of the governing party that they had led by 20 points in surveys in May, and still six or seven points as recently as this week.

"How can we lose 7 per cent in just two days?" shouted one party worker, fighting back tears.

Not only had they fallen well short of a hoped-for majority with the liberal Free Democrats, they had failed even to match their result of 2002.

It was little consolation that they would probably still emerge - just - as the largest party. "All through the campaign we had such incredible momentum," one young campaigner said. "I just can't understand it."

Across Berlin at the Social Democrats' headquarters, the mood could not have been more different.

Schroeder's supporters fell silent as their exit poll projection of 34 per cent appeared on the screens - only marginally better than expected.

But seconds later the crowd erupted into cheers as the same projections polls put the conservatives less than 2 points ahead.

There was no doubt the Social Democrats had lost any chance of continuing their existing coalition with the environmentalist Greens. But Schroeder's showing testifies to his latest incredible comeback, spearheaded by his own tireless campaigning, since a crushing regional defeat for his party in May.

At the post-election television chat show, it was Schroeder who swaggered like a victor. And he allowed himself a moment of calculated cruelty as he brushed aside the idea that Merkel - despite being likely to emerge as leader of the biggest party in parliament - could ever lead a likely "grand coalition" with his party.

- REUTERS