Chirac presses on with labour reforms despite street protests

Despite signs of spreading youth unrest, President Jacques Chirac is expected to sign into law today the "easy hire, easy fire" jobs contract for the young which has plunged France into political and social crisis.

But President Chirac - in a gamble which may backfire - is expected to call an immediate "social" conference to try to negotiate a replacement for the law that he will have just signed.

Hopes that France's constitutional watchdog body, the Conseil Constitutionel, would cut through the Gordian knot of an increasingly muddled, bad-tempered and ideological dispute were dashed last night when council members declared that the new equal opportunities law, including the disputed contrat première embauche (CPE) or first-job contract, did not infringe the constitution of the Fifth Republic.

President Chirac now has nine days in which to decide whether to sign and promulgate the law. His Prime Minister, and long-time protégé, Dominique de Villepin, has made it clear that he will resign, plunging the French centre-right into crisis, if the President backs down before the mass demonstrations, strikes and forced university and school closures which have disrupted France in the past three weeks.

Sources at the Elysée Palace said M. Chirac would propose - probably in a television address tonight - a solution which might appeal to all sides. Copying the government tactics which helped to end the May 1968 student and worker revolt, he is expected to propose a round-table conference of government, trade unions, student groups and employers.

He is likely to promise that any agreement on jobs law for the young reached by such a "Grenelle" - so-called after the succesful two-day talks in the Ministry of Labour in the Rue de Grenelle in 1968 - would substitute for M. de Villepin's hated youth contracts.

One of the Gaullist ministers involved in the first "Grenelle" 38 years ago was Jacques Chirac, then the junior labour minister.

It was precisely M. de Villepin's refusal to consult the "social partners" on the CPE which has helped to stoke the intensity of the opposition among trade and students' unions. President Chirac may now, in effect, sign the youth contracts into law and then call negotiations afterwards.

His hopes of saving M. de Villepin's face - and his own - could yet dashed. Tempers are running high. The French left - from students' groups to the centre-left Socialist party - have the scent of political blood in their nostrils.

Both trades union and student leaders have refused to enter talks with the government until the CPE is withdrawn or suspended. It remains to be seen if all, or any, of the many mutually suspicious groups involved would heed M. Chirac's proposal and call off the protests, including nationwide strikes and marches on Tuesday.

In a series of hit-and-run actions yesterday, students blocked railway lines at the Gare de Lyon in Paris, and at Rennes, Limoges, Brest, Marseilles, Lille and other provincial stations. There were also blockages bystudents on the Boulevard Périphérique, Paris, and on the road approaches to Nantes, Rennes, Grenoble, Limoges, Lille and several other cities.

The "first jobs contract" was intended by M. de Villepin as a way of reducing France's 23 per cent unemployment among young people. It has been rejected by student unions of the hard and moderate left and by all five trades union federations, as an "ultra-capitalist" attempt to deny young people the kind of job security enjoyed by their parents.

The CPE would provide a two-year trial period in which workers aged 26 or younger could be fired without explanation (but with compensation ). M. de Villepin argues that this will make it easier for small and medium-sized companies to offer jobs to unqualified or underqualified young people.