The centre-right alliance of the German chancellor is likely to lose its majority in parliament's upper house after being defeated in a state election, an exit poll shows.
The poll by ARD television put Merkel's Christian Democrats (CDU) on 34.5 per cent and their Free Democrat (FDP) allies on 6.5 per cent, short of a majority and leaving the make up of North Rhine-Westphalia's next government unclear.
The loss of a majority in the state - and as a consequence in the federal upper house - means Merkel will have to rely on opposition parties for support for her policy programme.
The CDU and FDP have ruled in North Rhine-Westphalia - Germany's most populous state - since 2005, when they won 44.8 per cent and 6.2 per cent of the vote respectively.
Sunday's election came just two days after Germany's parliament approved about $28bn in emergency loans over three years to Greece as part of a EU-International Monetary Fund rescue package.
A YouGov poll on Saturday had predicted that 21 per cent of state voters would change their vote due to the Greek bailout.
Al Jazeera's Nadim Baba, reporting from Dusseldorf, said "people have been asking themselves how the Greece factor will actually affect this regional vote".
"Now, I think, it has become clear that [Greece] has been a factor. There has been discontent all along about Germany's contribution towards the bailout of Greece," he said.
Our correspondent said control of the regional parliament in North Rhine-Westphalia could go to the Social Democrats and the Green party.
"What's happened just in the last few minutes is that things have changed in terms of these exit polls ...
"We've got to be cautious, but the latest is that the Social Democrats - together with the Green party -according to the latest projections, could control this regional parliament.
"There're already negative signs coming out of Merkel's Free Democratic party allies," he said.
"They're not happy. They've actually done worse than they were predicted, and chancellor Merkel's own Christian Democrats are down about 10 per cent on the last time around.
Klaus-Peter Schoeppner, head of the polling institute Emnid, said the bailout had "electrified people as seldom before and is going to play a determining role".
Merkel has made more than 15 visits to the region recently and made frequent media announcements this week on why the aid to Greece, that is opposed by most Germans, was needed.
Many Germans believe the Greek loan money should be used to ease fiscal tightening at home.
"The election is extremely important because it is the first vote after the federal election and the poll in this big German state is being seen as a test for her [Merkel]," Gerd Langguth, a political scientist at Bonn University and biographer of the chancellor, said.
However, Langguth added the CDU-FDP majority loss "would not be a catastrophe but it would certainly make things more complicated and difficult for the chancellor".