But, after a two-hour talk between the Prime Minister and the student groups, which have organised protests over the past two and a half weeks, student organisations said they would still hold a protest march in Paris on Thursday unless the proposal was scrapped entirely.
A demonstration in the capital last Friday ended in violence. Similar protests in the provinces since the beginning of the month have also been rough, on occasion.
At the Paris-Dauphine university, which was founded to alleviate pressure on other faculties in the aftermath of the May 1968 student violence, which paralysed France, schoolchildren from the suburbs invaded the main lecture hall yesterday. They tried to stop plans for a 25th anniversary celebration.
The children said they had come to speak to Francois Fillon, the Gaullist Higher Education Minister, who was due to attend the anniversary. But Mr Fillon had cancelled his visit.
After meeting the student representatives, Mr Balladur asked Michel Bon, the head of the state employment agency, the ANPE, to study ways of replacing the plan. Made law last week, it allows employers to cut the legal minimum wage, the Smic, by 20 per cent for under-26-year-olds.
The government maintained that the new Contrat d'Insertion Profes sionnelle (CIP) would encourage firms to take on young workers, afflicted by a catastrophic 23 per cent unemployment rate. Student organisations countered that the proposal, fixing the minimum monthly wage at 3,790 francs (pounds 439), devalued young peoples' work and turned them into cheap labour.
When the Smic was introduced in near full-employment days in 1970, it was hailed as a piece of social legislation which would guarantee workers' rights and protect them against exploitation.
The issue has presented Mr Balladur with his most serious crisis since the Gaullist became Prime Minister a year ago. If he were to back down and withdraw the CIP, this would be attacked as evidence of weakness.
Already, his government has climbed down over a plan to re-structure Air France and lay off workers, after ground staff invaded Paris runways last October.
It also bowed in the face of violent fishermen's protests and was forced to withdraw a controversial law allowing extra state funding of private schools, when this was ruled unconstitutional by the Constitutional Court. Hundreds of thousands of demonstrators turned out to oppose the reform.
Mr Balladur, however, is still consistently ranked the most likely politician to succeed Francois Mitterrand, at the end of the President's mandate next year.
The protests came just before local departmental, or cantonal, elections in the French provinces. Although the conservative coalition parties retained control of 75 of the 95 departments, the Socialists, trounced in general elections a year ago, made something of a comeback.
They suffered only an aggregate loss of two seats, and took control of three new departments, while losing control of one.
A parallel opinion poll conducted by the BVA institute showed 49 per cent overall satisfaction with Mr Balladur's policies. Fifty per cent expressed dissatisfaction. Two- thirds, however, said they did not consider the opposition had a credible alternative.
After the second round of voting on Sunday, Mr Balladur said he hoped to reopen a dialogue with the young to explain his policies. Michel Rocard, the Socialist Party leader, who was prime minister from 1988 to 1991, said he interpreted Mr Balladur's words as a sign that he was preparing to abandon the CIP. He said Mr Balladur would be right to do so.Reuse content