Mercel faces defeat again as Nazis MB returning to German Government.
Angela Merkel's party has made historic losses in elections for the Berlin state parliament after a mayor warned of a resurgence of Nazis in Germany.
Many voters turned to the far-right Alternative for Germany (AfD), which with 13 per cent of the vote will enter the German capital's assembly for the first time, according to initial projections.
Before the election, mayor Michael Müller had warned that a double-digit total for the AfD would' be seen around the world as a sign of the return of the rightwing and the Nazis in Germany'.
Mrs Merkel's Christian Democratic Union polled at 18 per cent - a drop of 5 points.
The centre-left Social Democrats (SPU) dropped 6 per cent to 22, but remain the largest party, and are expected to ditch the CDU from their current coalition.
It comes as Mrs Merkel admitted she wished she could 'turn back time' to prepare herself over the refugee crisis that unfolded in 2015.
On Saturday Merkel announced plans to jettison her 'we can do this' mantra about accommodating refugees as her poll ratings continued to slump.
'It's become a simple slogan, an almost meaningless formula,' she told a German newspaper, adding: 'Some feel provoked by the expression which of course was not the idea.'
The vote comes two weeks after the CDU was beaten into third place in the eastern state of Mecklenburg-Western Pomerania by the anti-immigrant AfD.
A year before a national election, the result in Berlin is set to raise pressure on Merkel and deepen rifts in her conservative camp, with more sniping expected from her Christian Social Union (CSU) allies in Bavaria.
The CSU's finance minister Markus Soeder was quick to call it the 'second massive wake-up call' in two weeks.
'A long-term and massive loss in trust among traditional voters threatens the conservative bloc,' he told Bild.
He called on the Chancellor's right-left national coalition to win back support by changing course on its immigration policy.
In particular, they want a cap of 200,000 refugees per year, which Merkel rejects.
The secretary general of Merkel's CDU, Peter Tauber, partly blamed the CSU for the losses in Berlin, which only 27 years ago was the front line of the Cold War.
'If there is a dispute within the conservative bloc, it doesn't help us on the ground - especially if this dispute is carried out in the way it is being done from Munich,' he said.
A backlash against her migrant policy has raised questions about whether Merkel, Europe's most powerful leader, will stand for a fourth term next year.
Given a dearth of options in her party, however, she is still the most likely candidate.
Today, she pledged that there would be no repeat of last year's 'chaotic' border opening to refugees, after the latest stinging defeat for her party.
Even as she defended the 'political and ethical' decision to let in one million asylum seekers in 2015 in the face of a potential humanitarian catastrophe, Merkel reached out to critics.
'If I could, I would turn back time many, many years to better prepare myself, the federal government and all those in positions of responsibility for the situation we were rather unprepared for in the late summer of 2015,' Merkel said.
In an unusually frank opening statement, Merkel said the errors of the past included a long-standing refusal to accept Germany's transformation into a multicultural society.
'We weren't exactly the world champions in integration before the refugee influx,' she wryly admitted, noting that the infrastructure for getting newcomers into language and job training had to be ramped up overnight.
Merkel acknowledged that her 'We can do it' rallying cry during the refugee crisis had become a provocation to many who felt it expressed a glibness about the challenges ahead and said she would now refrain from using it.
But she continued to resist calls from within her conservative bloc to set a formal upper limit for the number of asylum seekers admitted to Germany.
And she struck an optimistic note about the ability of Europe's top economic power to eventually integrate tens of thousands of refugees who will remain in Germany, including many from war-ravaged Syria.
'I am absolutely certain that we will emerge from this admittedly complicated phase better than we went into it,' she said.
Mrs Merkel has defended her immigration policy against her critics.
She said at a rally on Wednesday: 'It is not enough ... to know who is to blame, it is not enough just to know what you're against.
'We need good solutions that hold our society together.'
The AfD, founded in 2013 as an anti-euro party, currently polls nationally at between 11 and 14 per cent.
It has in the last year played to voters' fears about the integration of the roughly one million migrants who entered Germany last year.
'From zero to double digits, that's unique for Berlin. The grand coalition has been voted out - not yet at the national level, but that will happen next year,' said AfD candidate Georg Pazderski to cheering supporters after the results.
Commentators said the result indicated that the party looked poised to enter the lower house of parliament in 2017.
'With the Berlin result, the AfD has consolidated its position and shown it can appeal to voters across the board,' said Thomas Jaeger, political scientist at Cologne University.