Special report: French labor law
Related stories: Youth job law to be replaced by new measures: Chirac 
                          French PM regrets dropping of CPE law 
                          Paris yields to protestors to amend CPE job plan 

    PARIS, April 10 (Xinhua) -- French President Jacques Chirac announced Monday to replace a key provision of the First Employment Contract (CPE), a decision hailed as a victory by French trade unions.

French President Jacques Chirac (L) attends a meeting on the CPE (First Employment Contract), at the Elysee Palace in Paris. (Xinhua)

    "The president of the republic has decided to replace Article 8 of the law on equal opportunities with measures in favor of the professional insertion of young people in difficulty," Chirac's office said in the statement.

    Chirac's decision was taken "based on a proposal from the Prime Minister, after hearing the leaders and heads of the parliamentary groups of the parliamentary majority," it added.

    Later Monday morning, Prime Minister Dominique de Villepin, sponsor of the controversial First Employment Contract job law, stated in a televised broadcast that he regretted the law could not be applied.

    "The necessary conditions of confidence and calm are not there, either among young people, or companies, to allow the application of the First Job Contract," Villepin said after meetings with Chirac.

    The French ruling party, UMP (Union for a Popular Movement), hailed a solution of appeasement, while Francois Bayrou, president of the UDF (Union for French Democracy), UMP's ally, deplored for "two months lost".

    A poll by the French left-wing Liberation newspaper showed that Villepin's popularity, which stood at 49 percent early January, fell to 25 percent this weekend.

    The French National Assembly, or lower house of the parliament, will start to debate the new text Tuesday evening, according to a source from the government.

    French trade unions and students organizations, which have threatened the French government with another day of nationwide strike if the law had not been abolished, hailed the president's decision as victory.

    Unions and student leaders mobilized several million people in a two-month protest against the CPE.

    Bernard Thibault, president of the French largest union CGT, hailed the "victory against precariousness", while president of union CFDT Francois Chereque declared that the goal to withdraw the CPE had been reached and he was waiting for the detailed content of the new proposal of the law.

    Student leader Bruno Juillard said Chirac's decision was "a decisive victory", but urged protestors to "keep up the pressure" until parliament's vote on the article 8 of the law.

    The students confederation called for lifting the blockades in 84 shut down or partially disturbed universities to allow students to prepare for end-of-year examinations.

    The CPE law allowed employers to fire, without cause, newly hired workers under the age of 26 within two years.

    Opponents said the law would erode hard-won labor rights and make it more difficult for youths to find long-term jobs, and also criticized the maneuver as "surrealistic" and "undemocratic."

    The proposed law provoked massive protests, at times violent, in which more than 3,600 people were arrested.

    Details of the amended measures were expected later in the day and new legislation could be presented to the parliament as early as this week. Enditem