We had hoped for a better result, of course, Mrs Merkel says. But she adds that the CDU/CSU is the largest party in parliament and will form the next government.

The German chancellor has just taken to the stage in Berlin.

The SPD leader tells ZDF that the election result is "a disaster for democracy".

The Christian Socialists have slipped over 10 points in just four years in their Bavarian heartland, tweets Bavarian broadcaster B24.

Analysis by ZDF suggests that only the "grand coalition" of CDU/CSU plus SPD, or the "Jamaica coalition", of CDU/CSU plus liberal FDP plus the Greens, would have enough seats in the new Bundestag to form a governing coalition.

And we now know that Martin Schulz will not take part in a coalition with the CDU. So it is looking like the centre-right, the liberals and the Greens, if they can find enough common ground.

All other combinations of two or three parties would fail to reach a majority, the broadcaster's analyst says.

CDU politician and MEP Elmar Brok tells the BBC: "Today is a loss for the CDU and SPD, to the populism of AfD, but we have to ignore them in parliament."

Germany's other big public broadcaster ZDF has slightly different figures from the ARD projection we are quoting. They give the centre-right CDU/CSU a slightly higher result.

CDU/CSU: 33.3%

SPD: 20.8%

AFD: 13.2%

FDP: 10.1%

Greens: 9.2%

Die Linke (The Left): 8.9%

Martin Schulz does not step aside as leader of the social democrats.

The SPD leader thanks supporters and party workers, and all the candidates, particularly singling out the young socialists.

"The SPD clearly hasn't managed to appeal to our party base," says Martin Schulz.

While both the giants of German politics, the CDU/CSU and the SPD, appear to have lost votes compared with 2013, the Greens, the Left, the liberal FDP and AfD have boosted their share of the vote.

The four smaller parties are all well above the 5% threshold for entering the Bundestag, so there will be six parties in parliament.

So what does this mean for coalition forming?

The SPD leader is addressing supporters at Willy-Brandt-Haus in Berlin.

Alexander Gauland, co-leader of Alternative for Germany, is quoted as saying: "The battle isn't over. Please don't come out with anything that could later trip us up."

SPD General Secretary Hubertus Heil tells ZDF that his party wants to take on the role of the opposition for the sake of parliamentary democracy.

Ruling out forming another "grand coalition" with the CDU, he described the AfD - set to become Germany's third party - as "extreme right-wingers".

The AfD's chair, Frauke Petry, tweets that Germany has experienced an incomparable political earthquake.

"Let's do it!" she writes.

Party spokesman says they are proud to have achieved their second-best result (9%).

The SPD, which won just 20% of the vote, has already ruled out returning to a coalition with Angela Merkel's CDU/CSU, according to AFP.

While Angela Merkel's CDU/CSU alliance is the largest party, according to the exit poll, at 32.5% of the vote they will have lost many seats.

The social democratic SPD, led by Martin Schulz, has fallen to a new post-war low of 20%, according to the exit poll.