However, European Commission chief Jean-Claude Juncker responded positively to the plan, which needs the backing of fellow EU states if it is to succeed.

Merkel’s Christian Democrats (CDU) and their long-time Bavarian Christian Social Union (CSU) allies agreed on Monday to set up special transit zones at the border with Austria where migrants already registered in other EU countries will be held. They would then be sent back to the countries where they had registered first.

The plan appeared to settle a dispute between the two conservative parties that had threatened Merkel’s three-month-old government.

Merkel needs not only backing from the Social Democrats, who rejected a similar plan three years ago, but European Union states must also agree to take migrants back.

Social Democrat leader Andrea Nahles said the plan was worthless without bilateral deals with countries such as Italy and Austria.

“We have many open questions,” said Nahles, whose lawmakers are discussing the deal on Tuesday. Securing the consent of other EU countries was crucial, she said, adding: “That’s why I consider the deal for now as an uncovered cheque.” Juncker was upbeat. “I have not studied it in detail but at first glance - and I have asked the legal services to look at it - it seems to me to be in line with the law,” he told a news conference in Strasbourg.

Austria, the main entry point for migrants into Germany, said it would take measures to protect its own southern borders if Berlin went ahead with the transit zones. It fears that tighter border controls by its northern neighbour could raise the number of migrants on its own soil.

The new policy is a compromise that allowed Merkel and CSU head Horst Seehofer to defuse their confrontation.

Merkel said the deal showed Germany was not simply taking unilateral action but working with its European partners.

Seehofer, who is also German interior minister and wanted tighter national border controls, had threatened to resign, then delayed a decision and now says he will remain in the cabinet.

He said he would travel to Vienna soon and had spoken to Austrian Chancellor Sebastian Kurz by phone. “I have the impression that he is interested in a sensible solution,” Seehofer said before a party meeting.

The row underlined the deep divisions that remain within Europe on how to deal with the migrants who have arrived in the last three years.

Numbers are sharply down from the peak three years ago. However, there has been a surge in departures from Libya of migrants trying to cross by sea to Italy. The estimated number of migrants drowning off Libya has risen to 1,000 so far this year, according to the International Organization for Migration.

Merkel, Seehofer, Nahles and senior members of their parties are expected to meet at 1600 GMT to discuss the plan.

The idea of setting up centres at the border with Austria to process migrants is not new. At the height of the record influx of migrants in 2015, Merkel agreed to a CSU proposal to set up transit zones at the border to filter out migrants who have little chance of gaining asylum.

The plan was dropped after opposition from the Social Democrats. They argued such zones would not limit the number of migrants given that most were fleeing wars in the Middle East and Afghanistan and therefore entitled to asylum in Germany.

However, there seems to be little appetite among Social Democrats leaders to oppose the plan this time and trigger another crisis.

The party reluctantly agreed to renew its alliance with the CDU and CSU after suffering its worst post-war result in last September’s election. It can ill-afford to unnerve stability-loving Germans by rocking the coalition. Numbers of people held in the centres are also expected to be small.

Still, some Social Democrats accuse the CSU of wanting to appear tough on immigration before a regional election in Bavaria in October where the conservatives are expected to lose voters to the anti-immigrant party Alternative for Germany.

They say the CSU sparked the crisis for purely self-serving reasons, especially given that migrant arrival numbers have dropped significantly.

About 68,000 people applied for asylum in Germany in the first five months of this year, compared with a record of 745,500 in the whole of 2016. About 18,000 had already applied for asylum in another EU country.

Separate data from the German police shows that 4,600 people entered Germany from Austria illegally January-May, and about 2,500 of those were sent back.