Tony Blair has said the victory marks "a new era for Europe".

Mr Schr�der's call for a new centre or "Third Way" has invited comparisons with both Mr Blair and President Clinton.

He now has the challenge of leading the country through some major transitions such as the switch to the European common currency and the expansion of Nato and the European Union.

In an interview with BBC World Service television after his victory, Schr�der said: "We are not going to do everything differently ... Germany will remain a reliable partner abroad, perhaps a bit more dangerous for its competitors on world markets."

Kevin Connolly reports from Paris on French anxieties

But behind the scenes there is uncertainty about how a third centre-left government will change the political landscape of Europe.

If Mr Schr�der forms a coalition with the Green Party, there is some concern that his foreign policy agenda could be compromised.

The 54-year-old victor has also worried France with his pledge to offer Britain an equal place in the Franco-German axis at the heart of the European Union.

"We will not win over the British without equal rights for them," he wrote in a French newspaper.

Tentative welcome from France

Kohl and Chirac: great allies

France's conservative President Jacques Chirac said he was confident that France and Germany would continue to work ever more closely together.

But he backed the outgoing Chancellor Helmut Kohl in the election, with whom he enjoyed a very close relationship.

But although Mr Chirac's message of congratulations to Mr Schr�der was somewhat formal, Mr Jospin and his party were warmer in tone.

France's Socialist Party welcomed "the victory of the SPD and of Gerhard Schr�der with joy," saying it was "good news for all those in Europe who want more solidarity and more commitment by governments to creating jobs."

The party First Secretary, Francois Hollande, said: "His victory, coming after Tony Blair's in England and that of Lionel Jospin in France, confirms that Socialist and Social Democratic ideas dominate Europe today."

Blair: 'Tremendous'

The British Prime Minister Tony Blair congratulated Mr Schr�der, calling the election results a "tremendous thing" that opened up a new era for Europe.

Tony Blair hails "new era"

But Mr Blair also paid tribute to Mr Kohl for "all of the things he has done" for Europe.

"It is a tremendous thing that we will now see centre-left government in Britain, France, and Germany, and I look forward to working with him very closely indeed," Mr Blair said.

United States - close ally

President Clinton also called Mr Schr�der to congratulate him.

Although Mr Clinton also admired Mr Kohl, he has met Mr Schr�der twice in the last six months.

"He and I had good discussions in Berlin this spring and in Washington this summer. I look forward to working closely with him. Germany is one of America's closest allies. As always, our two governments will be fully engaged in a comprehensive policy agenda," Mr Clinton said.

Worry from Europe's right

The Spanish Government - one of the few currently representing the centre-right in the European Union - welcomed the election result, but also expressed hope that Madrid's former co-operation with Germany would continue.

The only dissenting voice among early reactions to the results came from former Italian Prime Minister Giulio Andreotti, who said it was part of a dangerous trend towards socialism in Europe.