The deal focuses on the areas where the three parties have most in common — all are liberal and centrist when it comes to social issues. But Mr Scholz conceded the ambitious plans would not come for free, and the three parties are further apart when it comes to tax and business.

The socially liberal but economically conservative FDP secured the big prize of the finance ministry, which is expected to go to its leader, Christian Lindner. 

He will face the task of finding the money to play for the coalition’s plans while sticking to his own party’s insistence on no tax rises. 

The Green leader Annalena Baerbock is expected to become foreign minister, in a move that could indicate a tougher German line on Russia and China. 

Ms Baerbock has long been critical of Mrs Merkel’s conciliatory approach, and has called for the controversial Nord Stream 2 pipeline to be scrapped. The Greens secured a new climate and business ministry, which is expected to go to their other leader, Robert Habeck.