BERLIN (Reuters) - German lawmakers gave their go ahead on Friday for the euro zone to negotiate a third bailout for Greece, heeding a warning from Chancellor Angela Merkel that the alternative to a deal with Athens was chaos.
The Bundestag lower house of parliament, whose backing is essential for the talks to start, decisively approved the move by 439 votes to 119, with 40 abstentions. But almost a fifth of Merkel's conservatives voted 'no' in a blow to the chancellor.
Popular misgivings run deep in Germany, the euro zone country which has already contributed most to Greece's two bailouts since 2010, about funneling yet more aid to Athens.
Finance Minister Wolfgang Schaeuble has questioned whether a new program will succeed, although the creditors' offer to Athens includes the conditions for more austerity and economic reform that Berlin had demanded.
But Merkel argued for negotiating a new deal to prevent a Greek exit from the euro - the "Grexit" that might undermine the entire currency union - and said suggestions Athens might temporarily leave the euro wouldn't work.
"The alternative to this agreement would not be a 'time-out' from the euro ... but rather predictable chaos," she told the Bundestag. "We would be grossly negligent, and act irresponsibly, if we didn’t at least attempt this way."
Schaeuble himself has suggested that Greece might be better off taking such a time-out from the euro zone to sort out its daunting economic problems.
But Merkel said neither Greece nor the other 18 euro zone member countries were willing to accept the idea. "Therefore this way was not viable," she added.
Schaeuble lined up with his boss and urged lawmakers to vote to start the negotiations, adding: "It's a last attempt to fulfil this extraordinarily difficult task."
Not all conservatives agreed. A total of 60 voted against starting negotiations, more than double the number of rebels in a February vote on extending a second bailout package. The jump highlighted grassroots opposition to granting further aid.
"If we don't have the courage to end it - Greece won't make it in the euro zone - there will be a fourth and a fifth bailout for Greece," said conservative eurosceptic Klaus-Peter Willsch, who voted 'no'.
The Social Democrats were more united with 175 of their lawmakers backing the start of the talks and only four against.
The rebels reflected popular discontent with Greece.
"Seven reasons why the Bundestag should vote 'No' today," ran a headline in the mass-selling Bild daily before the debate, listing 'Grexit is the better solution' and 'our grandchildren will pay' among its reasons.
A Forsa poll showed that 53 percent of German voters had wanted parliament to back the negotiations, with 42 percent against.
The Greek parliament approved the new bailout offer in the early hours of Thursday, although Prime Minister Alexis Tsipras had to rely on opposition support after some lawmakers from his left-wing Syriza party also rebelled.
Tsipras moved on Friday to replace his energy minister, one of the rebels, a government source said.
About a quarter of Syriza lawmakers voted 'no' or abstained, refusing to accept the demands for yet more austerity and reform included in the deal with Greece's creditors. The Greek electorate had already rejected an earlier offer in a referendum, and the latest is even tougher.
Still, the Greek parliamentary approval opened the way for European action to stave off Grexit, at least for the time being. The European Central Bank increased emergency funding to keep the country's banks from collapse on Thursday.
European Union finance ministers also approved 7 billion euros in bridge loans to Greece, allowing it to avoid defaulting on a bond payment to the ECB next Monday and clear its arrears with the IMF.
With Merkel under domestic pressure from lawmakers who have lost trust in Greece, the creditors agreed the tough deal at the weekend demanding that Athens cut pensions, raise value-added tax, and set aside 50 billion euros ($54 billion) of state assets to sell off.
Some members of the opposition Greens said they wanted Greece to stay in the euro but rejected austerity as a cure for its ills, leaving abstention as their only option.
"Another bloodletting won't make Greece more healthy again," said lawmaker Katrin Goering-Eckhardt, backing IMF calls for Greece's debt burden to be eased.
That fell on deaf ears with Merkel and Schaeuble, who said European law did not permit a "haircut" writing off part of the debt.
German conservatives have accused Tsipras of blackmail for saying other weaker euro zone countries would slide into crisis if Greece were forced out of the euro. But Gregor Gysi of the Left party, Syriza's ideological counterpart in Germany, turned the tables.
"You're not being blackmailed - you're the blackmailers yourselves" said Gysi. "Mr Schaeuble, I'm sorry but you're in the process of destroying the European idea."
($1 = 0.9186 euros)
Additional reporting by Michelle Martin, Caroline Copley and Andreas Rinke; editing by David Stamp, Janet McBride