German voters have taken part in two state polls, in Lower Saxony and Hesse. Opinion polls suggest Angela Merkel's party, the conservative CDU, may lose its majority in Hesse - a politically and economically important state.
A close ally of the German Chancellor Angela Merkel has suffered a dramatic electoral setback in the key state of Hesse's regional elections.
The current governor of Hesse, the CDU's Roland Koch, is running for a third term in office.
Initial results show the state's incumbent governor, Roland Koch, has lost his absolute majority.
Mr Koch has provoked a storm of protest with calls for tougher sentences and the deportation of what he called "young criminal foreigners."
According to exit polls, support for Mr Koch's conservative CDU party has plummeted to 36.5%.
Mr Koch is known as the "crown prince" by conservatives.
Initial results suggest Andrea Ypsilanti, the Social Democrat (SPD) candidate, won 37%.
But his campaign, which has focused on crime and immigration, has recently alienated many voters.
Defeat in Hesse for Chancellor Merkel's conservative party would be a political earthquake, as these regional elections are being seen as a big test for the chancellor ahead of next year's federal election.
The latest opinion polls suggest support for the ruling conservatives has dropped, paving the way for a victory by the Social Democrats (SPD).
Controversial campaign
Left challenge
Running for his third term in office, Mr Koch provoked a storm of protest by focusing on youth crime and calling for tough penalties against young offenders with immigrant backgrounds.
The SPD candidate and Mr Koch's main rival is Andrea Ypsilanti, the daughter of a trade union official.
In the end, the highly controversial and divisive campaign backfired as many voters turned their backs on the conservatives.
Ms Ypsilanti has won a following by focusing on education and wages
Ms Ypsilanti has won a following by focusing on education and wagesMeanwhile, Ms Ypsilanti, the daughter of a trade union official, won over voters by talking about local issues like education and a minimum wage.
She has won over voters by talking about local issues like education and a minimum wage.
With votes still being counted, it is not yet clear which of the main parties will take power, as their preferred coalition partners are also running neck-and-neck.
Once written off by the pollsters, Ms Ypsilanti has recently made a surprising comeback.
But for the Social Democrats, victory in Hesse would provide an important confidence boost.
Defeat for Chancellor Merkel's conservative party would be a political earthquake, as these regional elections are being seen as a big test for Ms Merkel ahead of next year's federal election.
Once trailing in the polls, the SPD would feel emboldened at a national level.
Campaign error?
In Lower Saxony, which also voted on Sunday, there was a more predictable outcome: the incumbent conservative governor, Christian Wulff, who ran a moderate campaign, was re-elected.
Professor Hajo Funke, a political scientist, says the conservatives' anti-foreigner campaign may have backfired.
"If Roland Koch wins, it will have effects not only for this election, but for the next state elections and the next federal elections," he told the BBC.
"Because then you will have a different CDU, with more foreign hatred, with more national conservative elements - in the party, and in the strategy."
With the big parties running neck and neck, the election campaign in Hesse has been emotionally charged and highly divisive.
As polling day approaches, conservative and SPD party managers are appealing to voters to make a clear choice.
