Leaders of Germany's IG Metall union have agreed to meet employers for exploratory talks in Stüttgart as their week-long strike for a 6.5 per cent pay rise spread to Berlin yesterday.

More than 10,000 engineering workers in Berlin walked out yesterday, the sector's first strike in the city in 70 years, joining in excess of 53,000 workers in the southern state of Baden-Württemberg.

"If the employers are prepared to make a new offer, we will end our strike quickly, but no one should get false hopes," said Mr Berthold Huber, IG Metall leader in Baden-Wüerttemberg.

He said that there was no point in returning to the negotiating table if employers planned to "reheat" their last offer made in pay talks.

It was that offer - of 3.3 per cent over 13 months and €190 over two months - which made unions pull out of pay talks three weeks ago. They had lowered their pay demand to around 4 per cent but returned to their original demand with strike action.

"It would really be a stroke of bad luck if we don't find a model that is now acceptable to both sides," said Mr Martin Kannegiesser, head of the employer's organisation Gesamtmall.

However, it remained unclear yesterday if employers would improve their pay offer.

They point to leading economists who have argued that a wage agreement for the country's three million metal and engineering workers would endanger Germany's already tentative recovery.

That would be disastrous for the Chancellor, Mr Gerhard Schröder, four months ahead of an election.

He said yesterday he was confident that both sides would reach an "economic" solution to the problem.