Torchlight parade for Schröder

An army torchlight parade for Gerhard Schröder yesterday in the outgoing chancellor's home-town marks the start of transition festivities that will culminate with Tuesday's inauguration of opposition leader Angela Merkel.

The grand military tattoo for Schröder and 600 dignitaries will feature 135 soldiers carrying torches and an army band playing melodies selected by Schröder - including I Did It My Way and Mack the Knife that Frank Sinatra made famous.

Schröder, 61, will turn over the chancellery keys to Merkel, 51, once she is sworn into office on Tuesday - two months after her Christian Democrats (CDU/CSU) edged ahead of Schröder's Social Democrats (SPD) in a general election.

But Schröder's SPD will remain in power as junior partners led by Vice Chancellor Franz Muentefering in a "grand coalition" government under Merkel's CDU/CSU after neither side won enough votes to form a majority with their preferred partners.

Merkel will become Germany's eighth post-war chancellor while Schröder, who will remain in parliament as an ordinary deputy, wants to work again as a lawyer after three decades in politics. He has declined any leadership role in his party.

The first drafts of history on Schröder's seven years in office were already being written even before his SPD-Greens government formally leaves office on Tuesday.

Schröder used a speech in Hanover yesterday before the "Grossen Zapfenstreich" (grand tattoo) in front of Hanover's city hall to underline the achievements on foreign policy and domestic reforms that he hopes will be remembered.

"A sovereign nation's self-confidence will not disappear again," Schröder said, referring to Germany standing up to its long-time post-war protector, the United States, in a row over US plans to invade Iraq.

He said, however, Germany had shown in the last seven years it is a reliable ally - despite the row with US President George W. Bush over Iraq.

Schröeder, who media reports said picked Mack the Knife as a farewell song as a wry reference to former ally Oskar Lafontaine who formed a new far-left party that led to Schröder's defeat, said his reforms had put Germany on the right track at home.

"Despite a few mistakes, we have changed the country's direction and put it on the right track," he said. "We had to face some extraordinary challenges."

While Lafontaine and some CDU leaders used interviews or columns to criticise Schröder's record, blaming him for causing divisions in the centre-left party and zig-zag policies, other assessments of his record were more favourable.