Angela Merkel, the German chancellor, admitted she was facing the toughest election campaign of her career on Monday, as a shock opinion poll found her party trailing for the first time in almost seven years.
Martin Schulz, the former European parliament president and outspoken EU critic, is now leading the race to be Germany’s next leader, according to the poll for Bild newspaper.
His centre-left Social Democrats (SPD) came first with 31 per cent, ahead of Mrs Merkel’s Christian Democrats (CDU) on 30 per cent.
The far-Right Alternative for Germany (AfD) were in the third place with 12 per cent.
It is the first time the CDU has been beaten into second place since 2010.
"This will be the hardest election campaign I have ever fought,” Mrs Merkel told a press conference in Munich.
"We have quite a fight on our hands, and we have plenty of work ahead of us.”
Mr Schulz has now emerged as the most serious challenger Mrs Merkel has faced in more than a decade in power.
The SPD has seen its support surge by a dramatic ten points in just two weeks since he took over as party leader following the resignation of Sigmar Gabriel.
In a sign of the panic now gripping Mrs Merkel’s camp, one of the harshest critics of her refugee policy on Monday agreed to set aside his differences with the chancellor and work towards her re-election.
Horst Seehofer, the leader of Mrs Merkel’s Bavarian sister party, the Christian Social Union (CSU), was threatening to pull out of an electoral alliance with Mrs Merkel unless she agreed to a limit on the number of refugees allowed into Germany.
But the two leaders put on a show of unity at a joint press conference to endorse Mrs Merkel’s candidacy.
All differences seemed forgotten as Mr Seehofer praised her "dazzling” record as chancellor.
Mrs Merkel said she was taking the threat from Mr Schulz seriously.
"In every election I’ve fought, I’ve taken my challenger seriously and offered him respect -- and it’ll be the same in this campaign,” she said.
But the SPD seized on the poll findings as evidence that the tide of German politics has turned decisively in their favour.
"Merkel is finished, just like Kohl was in 1998,” Johannes Kahrs, an MP from the party, told Welt newspaper, referring to Helmut Kohl, the former chancellor. "People want a fresh face.”
"There is something of a weariness when it comes to Merkel,” Carsten Brzeski, chief economist at ING-Diba bank, told Bloomsburg news agency.
"Martin Schulz is Angela Merkel with a beard,” Hermann Binkert, head of the Insa polling institute, told Bild. "The choice of Martin Schulz as chancellor candidate turned the mood in favour of the SPD. The election is not decided, it’s wide open.”
There are still seven months to go until September’s elections. Although rival polls still show Mrs Merkel’s CDU in the lead, all show Mr Schulz and the SPD closing the gap.