By Michelle Martin
BERLIN (Reuters) - Chastened by their worst result since 1949 in September's national election, Chancellor Angela Merkel's conservatives are hoping for victory in a regional vote on Sunday to strengthen their hand in thorny three-way coalition talks in Berlin.
While victory in the Lower Saxony region might strengthen Merkel's position within her party, a conservative failure to emerge as the strongest party could prompt talk of weakening authority and possible eventual succession, said Berlin-based political expert Gero Neugebauer.
Lower Saxony, an agricultural heartland and Germany's second biggest region, offers Merkel's Christian Democrats (CDU) the prospect of a morale boost as they seek to cobble together an unprecedented "Jamaica" national coalition with the liberal Free Democrats (FDP) and Greens.
The road to such an alliance, named after the Caribbean nation as the parties' colors match those of its flag, is littered with disputes on everything from migrants to tax and the environment. It would be the clunky coalition's federal debut if talks, due to start next week, prove a success.
Carsten Nickel, deputy research director at Teneo Intelligence, said Sunday's election - which polls show is set to be a neck-and-neck contest between the CDU and the rival Social Democrats (SPD) - would determine momentum going into national coalition negotiations.
"If Merkel managed to steal that state from the SPD, it would probably be a little bit of a boost," he said. "It would probably be slightly easier for her to argue internally for the required compromise and for striking the deals and so on that will be required over the next couple of weeks."
Merkel's CDU and their Bavarian sister party (CSU) removed a major stumbling block to coalition talks on Sunday by ending their long-running dispute over migrant policy with an agreement to limit the number of migrants coming to Germany.
Merkel's conservative bloc won 33 percent in September's national election, losing 8.5 points compared with 2013, as voters upset with Merkel's 2015 decision to open the borders to more than a million migrants abandoned the party. The result effectively brought an end to the existing national coalition with the SPD, who also performed badly.
The election in the northern state, home to carmaker Volkswagen <VOWG_p.DE>, was called after a lawmaker in the Greens party - junior coalition partner to the SPD there - defected to the CDU, robbing the ruling alliance of its one-seat majority.
The CDU enjoyed a 12-point lead over the SPD in August at the start of the campaign, which has focused on regional issues such as education and also an influx of migrants to Germany over the last two years, but has since shed support.
The latest INSA poll showed the SPD on 33 percent, closely followed by the CDU on 32 percent. The Greens and FDP were both on 10 percent while the anti-immigrant Alternative for Germany (AfD) was on 7 percent, putting it on course to win seats in Lower Saxony's state assembly for the first time.
(Reporting by Michelle Martin; editing by Ralph Boulton)