BERLIN (AFP) - Germany is set to introduce a national minimum wage, conservative Chancellor Angela Merkel said on Thursday, relenting on a key demand of her likely future centre-left governing partners.

"The Social Democrats will not conclude negotiations without a universal legal minimum wage," she said about ongoing talks to form a 'grand coalition' government.

She stressed that her Christian Democratic Union (CDU) had opposed such a move and added that she and her party would "try everything to prevent the loss of jobs through this measure".

Ms Merkel won September 22 elections but fell narrowly short of a governing majority, forcing her CDU and its Bavarian partners the CSU to enter into coalition talks with the Social Democratic Party (SPD).

In the talks, SPD chief Sigmar Gabriel, Ms Merkel's likely future vice chancellor, has insisted on a minimum wage of at least 8.50 euros (S$14.20) to help a growing army of working poor.

The SPD has promised to put any coalition deal up for a vote to its sceptical party base.

Ms Merkel's party favours separate pay deals by industrial sector and region, arguing that a national minimum wage would destroy jobs.