The mulled wine is brewing and the chestnuts are ready to roast, but with Covid-19 cases soaring the festive season is hanging in the balance for Germany's famous Christmas markets.

As the government scrambles to respond to a dramatic rise in infections over the past two weeks, some of the traditional markets have already been cancelled while others are still waiting nervously for decisions, AFP reports.

The Striezelmarkt in Dresden, the oldest Christmas market in Germany which draws around three million visitors annually, is due to open on November 22.

Stallholders have already built their wooden huts and are busy hanging decorations and assembling wooden figures. But they might have to take it all down again at any moment.