Germany's interior minister Horst Seehofer dropped his threat to quit after talks with Chancellor Angela Merkel's Christian Democrats, saying the two conservative parties had agreed to tighten border controls.

German Chancellor Angela Merkel and German Interior minister Horst Seehofer attend an event to commemorate victims of displacement in Berlin, Germany, June 20 2018.
German Chancellor Angela Merkel and German Interior minister Horst Seehofer attend an event to commemorate victims of displacement in Berlin, Germany, June 20 2018. (Reuters)

German Chancellor Angela Merkel and her rebellious Bavarian allies have reached a compromise to end a dispute over managing immigration that threatened to bring down her coalition government.

Interior Minister Horst Seehofer, leader of Merkel's Bavarian-only sister party emerged from talks late on Monday saying the compromise would "prevent the illegal immigration on the border between Germany and Austria."

Seehofer, leader of the Christian Social Union, had been in a standoff with Merkel over his plan to turn back at Germany's borders any asylum seekers who had registered in another European Union country. Merkel refused, saying a solution that involves other European nations was needed. 

Seehofer offered his resignation as party leader and interior minister at a CSU meeting on Sunday night, but was convinced to resume negotiations with Merkel. He didn't give details of the compromise, but said he no longer intended to resign.

Seehofer travelled to Berlin on Monday after offering to resign during a meeting of his Christian Social Union party on Sunday night. 

Seehofer was quoted as telling the Sueddeutsche Zeitung newspaper on Monday that he was in an "inconceivable" situation. He says "I won't let myself be fired by a chancellor who is only chancellor because of me."

TRT World's Ira Spitzer has more from Berlin. 

Seehofer said he wanted to turn asylum seekers who had already been registered in another European Union country back at Germany's border, but Merkel was adamant that Germany shouldn't take unilateral action.

Seehofer and Merkel, who have long had a difficult relationship, have sparred over migrant policy on and off since 2015.

Source: AP