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German Chancellor Angela Merkel delivers her speech during a Lower Saxony's Christian Democratic Union's (CDU) regional election campaign rally in Stade, Germany October13, 2017. REUTERS/Fabian Bimmer

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BERLIN (Reuters) - A senior member of the pro-business Free Democrat (FDP) party that is likely to be a partner in Chancellor Angela Merkel's new government said in a magazine interview he did not expect the coalition to form before the end of the year.

Next week Merkel's conservatives - who remain the biggest bloc in parliament despite losing support to the far right in a September election - are due to start talks on forming a tricky "Jamaica" coalition with the FDP and the Greens.

The alliance, which derives its name from the three parties' colours matching the Jamaican flag, is untried at national level and is likely to be fraught with disagreements on issues like migrants, tax, European Union reform and the environment.

Asked whether the parties could work together, FDP deputy leader Wolfgang Kubicki told news magazine Der Spiegel: "It can succeed. The most important thing is that trust needs to be built between participants and that takes time.

"That's why it would be illusory to believe we could conclude negotiations by Christmas."

Finance Minister Wolfgang Schaeuble said on Thursday he was optimistic that Merkel and her conservatives - of which he is a member - would be able to forge a new coalition government before Christmas.

Merkel's Christian Democrats (CDU) and their Bavarian sister party (CSU) removed a major stumbling block to the coalition talks on Sunday by ending a dispute over migrant policy with an agreement to limit to 200,000 the number of people Germany would accept per year on humanitarian grounds.

But Kubicki said the deal was just a starting point: "If the CDU and CSU think their agreement needs to be implemented exactly like that, we'll stand up and leave," he said.

Speculation is rife that the FDP will demand the post of finance minister as a price for joining a "Jamaica" coalition and Kubicki said it was up to FDP leader Christian Lindner to decide whether Lindner would fill that post or be FDP parliamentary floor leader.

But Volker Kauder, the CDU's leader in parliament, recently said the Finance Ministry should remain in the hands of his party to further the work of Wolfgang Schaeuble - expected to become parliamentary president.

Interior Minister Thomas de Maiziere, a member of Merkel's conservatives, urged the parties to be pragmatic.

"We'd be well advised not to be perfectionists in the upcoming coalition negotiations but rather to be open and to build trust that a government will be formed that acts sensibly even during unforeseeable crises," he told newspaper Frankfurter Allgemeine Zeitung.

(Reporting by Michelle Martin; Editing by Ros Russell)

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