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An election Sunday in the central state of Hesse saw both the CDU and the Social Democrats lose significant ground amid gains for both the Green party and the far-right Alternative for Germany party.

Ms Merkel, chancellor for 13 years, will have to invest her political capital and tactical acumen to keep together her loveless coalition, borne out of necessity seven months ago after an inconclusive federal election last year.

All this sangfroid is no stoical front in the face of defeat; it is the demeanour of a chancellor who knows that she has a few aces left up her sleeve.

German Chancellor Angela Merkel is facing calls from her own conservatives to cede the party's leadership, further eroding her authority after painful losses in a regional election.

That has given extra significance to the election in Hessen, which is home to 6.2 million of Germany's 82 million people. It was the first coalition between the CDU and the traditionally left-leaning Greens to last a full parliamentary term, and an unexpectedly harmonious alliance.

But only the Greens, who are in opposition nationally, are benefiting in polls.

Projections for ARD and ZDF public television, based on exit polls and partial counting, gave the CDU 27-28 per cent support and the centre-left Social Democrats almost 20 per cent.

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Just five years after the party's founding as a protest against euro zone bailouts, the anti-immigrant AfD now controls seats in all 16 of Germany's state parliaments, in addition to the national Bundestag and the European parliament. The party entered the national parliament previous year and, along with the Greens, has benefited from the federal government's disarray.

The party's state leader, Volker Bouffier, called the outcome "very humbling".

News agency DPA cited unnamed sources within Germany's ruling party on Monday morning that Dr Merkel, who has led the CDU since 2000 and has been Chancellor since 2005, would be stepping down in December in time for party conference.

The Social Democrats only reluctantly entered Merkel's national government in March, and many are dismayed by what has happened since.

SPD leader Andrea Nahles said she would use a roadmap with which to measure the progress of the ruling coalition, which has been plagued by infighting, at a mid-term review next year. He has feuded with her on and off for three years over Merkel's initially welcoming approach to migrants, and an argument between the pair in June over whether to turn back migrants at the German-Austrian border came close to bringing down her government. It has failed to convince voters that it's achieving much on other matters.

With tensions high in the Berlin coalition, "no-one can say with 100 percent certainty how stable things will stay, what kind of dynamics will emerge in the individual parties" after the election, CDU general secretary Annegret Kramp-Karrenbauer said Thursday.