Social Democrats' boss Martin Schulz, who past year led the party to its worst national election result since World War II, looks headed for the Foreign Ministry. Should the vote fail, Germany could be headed to an unprecedented new election.
A former head of the party's youth wing, Nahles stepped up her consolidation of power in the SPD?in 2009 with her election as its general secretary - a move that some analysts saw at the time as tilting the party to the left.
Schulz said, growing debate surrounding his bid for Foreign Ministry portfolio, could jeopardize the upcoming vote of SPD members on the coalition agreement. The results from that are due in early March, and that vote is now looking too close to call either way.
But before she can be sworn in, a final hurdle looms: the hard-fought pact between her CDU/CSU bloc and the Social Democratic Party must still be approved by the SPD's skeptical rank-and-file. "That also means that my personal ambitions must come behind the interests of the party".
On Thursday, Schulz announced his bid to become Foreign Minister, in a Merkel-led "grand coalition" government.
But before anyone can take up their posts in a new Merkel-led cabinet, the SPD's rank-and-file have to give their blessing to the coalition pact. There was much internal criticism of the results of the interim talks (for instance, over a suggested upper limit on how many refugees Germany would accept - a proposal so problematic that Merkel refused to put it in her own party programme), in part leading to the near-miss at January's Bonn conference.
Hailing from the Eifel region bordering Luxembourg and Belgium, Nahles joined the SPD 30 years ago and rose through the ranks as a fiery left-winger praised by ex-SPD leader Oskar Lafontaine as a "gift from God" for the party.
The SPD and CDU both had their worst results for decades in the election, which catapulted the far-right Alternative for Germany (AfD) into parliament for the first time, with 94 seats.
His announcement also upset Germany's current foreign minister - veteran SPD member Sigmar Gabriel - who complained of a "lack of respect" and said he was popular among ordinary Germans.
Martin Schulz, leader of the German Social Democrats (SPD), said Friday he won't be the next foreign minister.
Schulz was Merkel's defeated challenger in September.
"This is the VW Passat of coalition agreements", said Jan Techau, Europe programme director of the German Marshall Fund think tank.