Weakened French PM vows to battle on "until the end"

PARIS, Apr 6 (Reuters) French Prime Minister Dominique de Villepin vowed today to battle on ''until the end'', rejecting growing speculation he might resign over a youth job law that has brought millions onto the streets.

Villepin's popularity has slumped during weeks of protests against his CPE First Job Contract, and the prime minister has also been weakened inside the ruling right after President Jacques Chirac promised changes to the CPE last Friday.

But Villepin said he had a job to finish in the government.

''The president has trusted me with a mission -- to lead the battle for jobs, to respond to the concerns of our compatriots,'' Villepin told a news conference.

''This battle, I will lead it until the end,'' he said.

Commentators have said Villepin has become sidelined over the CPE because lawmakers from Chirac's Union for a Popular Movement (UMP) are now leading talks with unions on possible amendments and will meet student leaders later today.

Villepin said he was willing to listen to all proposals emerging from the talks but stopped short of saying that a repeal of the CPE -- as unions demand -- was possible.

''We have opened a period of dialogue, without any preconditions, any taboos,'' Villepin said. ''My immediate priority of course is to calm (the situation). It's time to get out of the crisis.'' Trade unions, scenting victory after millions took to the street in past weeks, have given the government until April 15 to repeal the CPE. The contract became law on Sunday but the government has urged employers not to use it before the changes.

IMAGE CONCERNS ''This movement is strong,'' Jean-Claude Mailly, head of the Force Ouvriere trade union, told France Inter radio.

''And the longer it continues, the stronger it will be,'' he added, warning the government not to try and drag out talks in the hope that the protest movement would ebb.

Some 50 universities remained disrupted across France as students continued protests against the contract, which allows employers to summarily fire workers under the age of 26 during the first two years without stating a reason.

Yannick Vallee, vice president of the association of university presidents, called for a restart of classes, saying the CPE no longer really existed and the students have won.

Students have called new protests for next Tuesday while unions meet on Monday to plot strategy. The April 15 deadline coincides with the start of France's Easter holidays and could reflect concerns the protests might fizzle out over that period.

In southern Toulouse, students blocked a transport of parts for European planemaker Airbus's new A380 double-decker plane early today. They cleared the streets after a few hours.

Students also disrupted train traffic at two Paris stations.

Economists have noted that continued protests could hit French consumer confidence, as it briefly did during riots in Paris suburbs last November, and ministers have voiced concern over the effects of weeks of the protests on tourism.

Finance Minister Thierry Breton said no effect was notable on the economy yet, but he added: ''We are of course worried by the image it gives of France.'' Last Friday, Chirac proposed cutting the trial period of the CPE to one year and requiring firms to give reasons for any layoffs, but the unions want the entire contract scrapped.

Scrapping the law could undermine Villepin's premiership and his thinly veiled ambitions to become the right's candidate for 2007 presidential elections.

With the trade union negotiations now being passed to the UMP, the party's head Nicolas Sarkozy -- Villepin's main conservative rival for the poll -- has been strengthened.

REUTERS OM KP1816