Schröder had wanted the vote to be defeated in order to trigger new elections 12 months ahead of schedule and had instructed members of his Social Democratic Party (SPD) to abstain in the vote in the Bundestag, or lower house of parliament.

The tactic worked -- 296 voted against the measure and 148 abstained out of a total of 595 votes. The 'yes' votes tallied 151.

The procedure which leads to new elections is based on Article 68 of the German Basic Law, which says: "If a vote of confidence brought by the federal chancellor is not approved by a majority of the members of the Bundestag, the president of the federal republic can, at the request of the federal chancellor, dissolve the Bundestag within 21 days."

President's decision

President Horst Köhler therefore has until July 22 to officially recognize the lack of a majority and dissolve the Bundestag.

Köhler has not yet revealed what his intentions are, saying only that he would study the situation after the vote.

If the Bundestag is dissolved, Köhler must call an election to take place within 60 days. However the election can only take place on a holiday or a Sunday.

The election cannot take place during the school summer holidays, which vary according to the regional states -- in Bavaria for example they do not end until September 12.

Most observers agree that the date of September 18 is the most likely for an election.

However the decision is far from certain.

Some of the smaller political parties and a handful of coalition deputies have vowed to mount a federal court challenge against bringing the poll forward.

Precedents

There are two precedents for the confidence vote in the history of the German federal republic.

In 1972, Chancellor Willy Brandt lost a confidence vote he called in the face of a highly divided parliament. He went on to gain a comfortable majority in the ensuing general election.

In 1983, Chancellor Helmut Kohl called a confidence vote after coming to power the previous year following the resignation of former chancellor Helmut Schmidt.

Kohl lost the confidence vote and won the subsequent election.