Under a cloud of controversy German President Christian Wulff resigns.

Wulff has been embroiled in a scandal over money, power and political favours and on Thursday German state prosecutors asked parliament to remove his legal immunity.

Chancellor Angela Merkel has plenty on her plate dealing with the eurozone crisis and, in an unusual move, has said she will work with opposition parties to find a candidate to replace him.

(SOUNDBITE) (German) GERMAN CHANCELLOR ANGELA MERKEL, SAYING:

"The parties of the government, CDU, CSU and FDP, will now consult and then approach the Social Democrats and the Greens, we want to conduct talks with the aim of being able to propose a consensus candidate for the election of the next president of the German Republic."

The chancellor said she deeply regretted Wulff's decision to resign.

Her political reach-out may be an attempt to avoid a divisive national debate over the largely ceremonial post.

Lily Grimes, Reuters