Angela Merkel has said double-jabbed Britons should be able to holiday in Germany without quarantine in the "foreseeable future" after her opposition over the Delta variant.
The German Chancellor said travel restrictions were being reviewed for those who have received two coronavirus vaccines after holding talks with Prime Minister Boris Johnson at Chequers on Friday.
She acknowledged the strain first identified in India was now spreading "very rapidly" in Germany, having previously pressed EU leaders to impose quarantine restrictions on Britons regardless of their vaccination status.
Ms Merkel said: "We have adopted certain protective measures when we were not so familiar with the Delta variant.
"We now see that the share of the Delta variant in Germany is increasing very rapidly.
"We're reviewing continuously our travel restrictions and we think that in the foreseeable future those who have received double jabs will then according to our classification, and Britain now obviously is a high incidence area, will be able travel again without having to go into quarantine."
Currently, anybody travelling from the UK to Germany has to quarantine for two weeks, even if they are vaccinated against the coronavirus or have tested negative.
In a wide-ranging press conference following talks at Chequers on Friday afternoon, Mrs Merkel also expressed "grave concern" at the numbers of fans being admitted to the Euro 2020 matches at Wembley.
She said she raised the issue with Mr Johnson during their discussion.
"I say this with grave concern. I have also said this to the Prime Minister," she told the news conference.
"We in Germany, as you know, have less people attend games in the Munich stadium but the British Government will obviously take its own decision.
"But I am very much concerned whether it is not a bit too much."
However Mr Johnson said he did not plan to order a reduction in crowds attending the remaining Euro 2020 matches in London.
Crowd capacity at Wembley Stadium will be increased to more than 60,000 fans for the semi-finals and final of Euro 2020 under a pilot scheme announced last week.
"Of course we'll follow the scientific guidance and the advice if we receive any such suggestion," Mr Johnson said in response to a question at the news conference.
"But at the moment...the position is very clear in the UK, which is that we have certain events which we can put on in a very careful and controlled manner with testing of everybody who goes there."
Mrs Merkel also said Germany and the UK have agreed to establish regular inter-governmental consultations.
She said Germany wanted to underpin it with a new co-operation treaty.
"It is, now that Britain has left the European Union, a good opportunity to open a new chapter in our relationship," she said.
On Germany’s 2-0 defeat to England in Euro 2020, she said: “Obviously this was not a voluntary offer on my side to create the right mood for this visit but I have to accept it.
“You deserved it but we were a little bit sad but now the best of luck to the British team.”