The leadership of Germany's Social Democrats (SPD) accepted the recommendation of party leader Martin Schulz to begin exploratory talks on forming a government with Chancellor Angela Merkel's conservatives, an SPD source said.

Any final decision on supporting a Merkel-led government must be ratified by party members at a special congress.

The move is highly unpopular among some party members because the previous coalition government between the two was followed by a record-low election result for the SPD in September.

The collapse of talks with two smaller parties last month left Merkel with two options: forming a minority government or entering talks with the SPD for another grand coalition. She has ruled out the former, arguing that Europe needs a stable German government.