FRENCH President Jacques Chirac announced late yesterday that his government was abandoning a youth jobs plan that has sparked million-strong protests and replacing it with new employment measures for young people.

"The President of the republic has decided to replace Article 8 of the law on equal opportunities with measures in favour of the professional insertion of young people in difficulty," the President's statement said. It said Mr Chirac's decision was "based on a proposal from the Prime Minister, after hearing the leaders and heads of the parliamentary groups of the parliamentary majority".

The announcement followed a meeting with Prime Minister Dominique de Villepin and leaders of the ruling Union for a Popular Movement on the fate of the controversial First Employment Contract.

Mr de Villepin said he regretted a lack of public understanding about the jobs measure. A visibly sombre Mr Villepin, speaking moments after Mr Chirac ordered the measure replaced, said he had hoped to act quickly to reduce soaring youth joblessness.

"This was not understood by everyone, I'm sorry to say," he said.

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Unions and student groups - which had been demanding the measure's complete withdrawal - were to meet last night to decide what further action to take.

Several unions indicated earlier yesterday they would be satisfied with the measure being replaced.

"If there is a new text in which the CPE does not appear, that will mean it has been withdrawn, that is what counts," said Francois Chereque, head of the CFDT union.

The decision is an attempt by Mr Chirac to put an end to a months-long protest movement that has seen millions of people protesting.

Unions warned the Government last week that if the CPE was not rescinded by April 17 they would call for more nationwide protests. - AFP/DPA