Projections showed the CSU, sister party of German Chancellor Angela Merkel's Christian Democrats (CDU), polling around 43.5 percent of the vote in its worst showing in half a century. The CSU has held an absolute majority in Bavaria since 1962 and won 60.7 percent of the vote in the last state election in 2004.

CSU Secretary General Christine Haderthauer said the disastrous result was a black day for the party which had ruled unchallenged for more than 40 years and will now be forced to look for a coalition partner.

"We have clearly failed to achieve our goal," she said in reference to the party's stated intention of retaining its absolute majority in the Alpine state.

The Social Democrats (SPD), which governs in a grand coalition with the CDU in Berlin, polled around 18.9 percent, even less than in the last state election. It is the party's worst result in its history in the state.

Small parties profit

Among the smaller parties, the conservative Free Voters entered the state parliament in Munich for the first time with 10.2 percent and the liberal Free Democrats (FPD) were back after an absence of 14 years with 7.8 percent.

The environmentalist Greens won 9.1 percent, but the pro-Labor Left Party was hovering below the 5 percent needed for parliamentary representation.

The CSU's heavy losses could signal a weakening of support for the conservative camp and hurt Merkel's chances of retaining power in federal elections scheduled for September next year.

The CSU's good showing in Bavaria in the 2004 general election helped elevate Merkel to power at the head of a grand coalition with the left-of-center Social Democrats (SPD).

Unhappy voters

While Bavarian Premier Guenther Beckstein, 64, had still voiced his optimism about the election outcome earlier in the day, he conceded the heavy losses after polling ended.

"I am ready to lead a coalition government as well," said Beckstein, who was elected premier last year after Stoiber was toppled in a party rebellion.

"The people have shown that they want a CSU-led government, but that they do not want the CSU to govern Bavaria alone," he said, adding the party would immediately start to look for a coalition partner.

Losses by the state-owned bank BayernLB, the scrapping of a prestigious super-fast train link to Munich airport and a controversial smoking ban have led to voter discontent with the leadership duo of Beckstein and party chairman Erwin Huber.

The CSU's most likely coalition partner is now the FDP. Another possibility is the Free Voters. While technically a possibility, a coalition of the four smaller parties, including the SPD and the Greens, is highly unlikely as at least the FDP has already said that it is not willing to consider this.