German Chancellor Angela Merkel has rejected speculation that the collapse of the liberal Free Democrats (FDP) in a state election at the weekend could spell the end of her center-right coalition.

The chancellor told a press conference that there was no link between what happened in the small western state of Saarland on Sunday and the state of the federal government.

"Anyone who has looked at the Saarland in detail knows that the Saarland is the Saarland. We are working well together in Berlin," Merkel said.

"We have a considerable amount of work ahead of us. I assume there will be good and sensible cooperation (with the FDP) for the sake of the issues and the necessary decisions for Germany," she added.

The FDP, which is the junior partner in the coalition with Merkel's Christian Democrats (CDU), sank to just 1.2 percent in Sunday's election in the Saarland. This represents an eight percent drop in support compared to the previous election in the small western state. It also means that the FDP will not be represented in the legislature, as it missed the five-percent hurdle all parties need to enter the assembly.

Opinion polls suggest the Free Democrats are also in danger of missing the five percent hurdle in elections in the states of Schleswig-Holstein and North Rhine Westphalia in May.

The party's national leader, Economics Minister Philipp Rösler also played down the effect of Sunday's debacle. The FDP "would continue its work with the necessary serenity," Rösler told a Berlin press conference.

Merkel's CDU emerged as the clear winner of Sunday's vote in the Saarland with 35.2 percent of the vote, compared with 30.6 percent for the Social Democrats. The two parties are expected to form a “grand coalition” government, with the CDU's Annegret Kamp-Larrenbauer retaining her post as state premier. She had triggered the early election in January by expelling the FDP from a three-way coalition which also included the Green Party.

pfd/rc (dpa, dpad)