The SPD decided late on Friday it would poll its 472,000 grassroots members if it ends up deciding to join Merkel, a union many in the party oppose, in what could be an unwieldy process that could complicate the creation of a new government.
Bavaria State Premier Horst Seehofer said Germans had expressed the wish in last Sunday's ballot for a government led by Merkel, and to torpedo attempts to create a coalition on tactical grounds would damage the politics and the SPD itself.
"The heads of the parties all have a mandate and the responsibility to ensure stability," Seehofer said, in an interview with newspaper Bild am Sonntag, to appear on Sunday.
"We are not a bunch of rabbits, running round a field because we are too scared to form a government."
Germany should aim for a new coalition within the next two months, he said, otherwise it risked making itself look ridiculous in the eyes of the world.
Merkel's Christian Democrats emerged as the dominant party from Sunday's election but her party fell short of a majority, winning 311 seats in the 630-seat parliament while the SPD took 192. The Greens got 63 seats and the radical Left party have 64.
Her conservatives need a new coalition partner and would prefer a grand coalition with the SPD, a reprisal of the right-centre alliance she led from 2005 to 2009. But SPD leaders and party members fear a loss of identity.
In an extraordinary meeting on Friday 200 SPD leaders gave embattled chairman Sigmar Gabriel a green light to begin exploratory talks with the conservatives to see if there is scope for full-fledged talks.
Ordinarily a party chairman or a small group makes decisions to enter talks but Gabriel, under pressure for another election drubbing, is being cautious and seeking party endorsements for all key decisions.
Exploratory talks with Merkel and her conservatives could start on Monday or next week. Based on past experience full-fledged talks would take up to two months.
According to the decision on Friday, all 472,000 SPD members would be given the chance to vote on any decision to form a grand coalition in mid-November, before the annual SPD party congress in Leipzig set for Nov. 14-16.
An opinion poll on Friday showed two-thirds of SPD members oppose a grand coalition because they fear the party could wither further in the shadow of the popular chancellor.
The right-left coalition would nevertheless be the most popular constellation in Germany, the poll also found. More than half of Germans said they would welcome a grand coalition.
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