Schroeder punished in state polls

Support for the SPD fell by one third to 30.8 percent. The conservative Christian Democrats (CDU) retained a majority in the state assembly with 47.5 percent.

In the European elections in June, the SPD suffered its worst result in decades.

The government's hated economic reforms have been blamed for the defeat.

These include controversial cuts in social welfare payments.

Saarland, with its coalmining past, was an SPD stronghold until 1999.

CDU national leader Angela Merkel - likely to challenge Mr Schroeder for the chancellorship in 2006's general elections - described the result as "sensational".

The SPD state leader, Heiko Maas, conceded the result was a "clear and bitter defeat", but party officials insisted there was no going back on the government's economic programme.