German Chancellor Angela Merkel's Christian Democrats (CDU) will likely come out in favour of a mandatory minimum wage at their annual party congress in November, a CDU paper obtained by Reuters showed.

Germany's CDU believes it is important to introduce an overall binding minimum wage into the sectors which do not have such a wage determined by collective bargaining, read the proposal for the congress. Sources said Merkel had backed it.

The question is no longer whether we will have a minimum wage, but how to negotiate the correct level, Labour Minister Ursula von der Leyen told the Sueddeutsche Zeitung.

Germany's CDU has long opposed a blanket minimum wage determined by politicians, seen as too much political interference in wage bargaining between unions and employers.

The paper shows the CDU has come up with a compromise. The minimum wage for those sectors that do not already have one will be determined by a commission of employers and employees -- it will not be a political minimum wage.

The level should be in line with the minimum wage already in place for part-time workers, set at 7.79 euros (£6.82) in western Germany and 6.89 euros in eastern Germany.

The opposition Social Democrats and German labour unions, which last year protested in tens of thousands against social equality ahead of the CDU's congress, welcomed the news.

We need an legally binding minimum wage on the level of our western European neighbours, so at the minimum 8.5 euros (£7.02) per hour, the head of the Verdi union, Frank Bsirske, was quoted by German newspaper Die Welt as saying.

Verdi represents almost 600,000 workers.

Lower Saxony state premier David McAllister said his party -- the CDU -- must admit that wages can be too low in Germany.

The question of appropriate payment is key for social fairness, he told daily Hannoversche Allgemeine Zeitung.

Europe's largest economy also raised competitiveness over the past decade partly by keeping wages low and making the labour market more flexible.

But frustration has risen among workers who feel they have not shared enough in Germany's faster-than-expected recovery.

(Reporting By Andreas Rinke and Thorsten Severin, Writing by Sarah Marsh;editing by Sofina Mirza-Reid)