The German Parliament has rejected an attempt to introduce a quota for women on companies' boards of directors — defusing for now a divisive issue for Chancellor Angela Merkel's government.

Merkel's center-right coalition has long been at odds over whether to introduce a fixed quota and there are divisions within Merkel's conservative party, too. With elections coming in September, the opposition hoped to exploit that with a vote on a proposal to introduce a 20 percent minimum for women on publicly traded companies' boards in 2018, rising to 40 percent in 2023.

Merkel's party scrambled to avoid an embarrassing rebellion, agreeing to pledge in its election manifesto a 30 percent quota from 2020. On Thursday, lawmakers rejected the opposition proposal by a 320-277 margin, with one abstention.