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German parties agree to motorway toll for foreigners

BERLIN, Nov 26 (Reuters) - German parties negotiating a coalition deal have overcome one of the most divisive issues in the talks, agreeing to a demand by Chancellor Angela Merkel's Bavarian allies to introduce a motorway toll for foreign-registered cars.

The toll was vigorously opposed by the centre-left Social Democrats (SPD) and Merkel herself ruled out introducing it during a televised election debate in September, saying: "There will be no car toll with me".

But it played well with voters in Bavaria in a recent regional vote and Horst Seehofer, head of the Christian Social Union (CSU), has refused to back down, making it a condition for joining a "grand coalition" government.

"A law will be passed in the course of 2014 on this," the latest draft of the coalition agreement said.

Opponents of the scheme say it could breach European Union law by discriminating against foreigners.

But in a surprise move in October, the EU's traffic commissioner said the plan might be feasible if it was structured so that the toll was imposed on all cars, and German car owners were given off-setting tax relief. (Reporting by Markus Wacket; Writing by Noah Barkin; Editing by Madeline Chambers)