Opposition to the new contract has provoked a serious crisis for the government of Prime Minister Dominique de Villepin as it has mobilized students, the left-wing opposition and unions.

Flames erupt from a car and a motorbike in front of a hotel during clashes between youths and police that followed a student protest against the First Employment Contract (CPE), in Paris, March 16, 2006. [Reuters]

In a bid to further increase pressure, a key union leader said the march could be followed by a general strike.

"If they don't listen to us we are going to have to think about moving to a general strike across the whole country," said Bernard Thibault, head of the Confederation of General Workers union, one of France's largest.

"I'm optimistic ... that the government will finally take notice of the situation they've created for themselves," he said on France 3 television, adding the march would top the March 7 rallies when unions said 1 million people took to the streets.

Villepin says his First Job Contract will help young people find jobs, crucial because youth unemployment is more than double the national average and rises to 50 percent in some poor suburbs where it was a factor behind riots in November.

But the law allows employers to dismiss people under 26 at any time during a 2-year trial period and that would destroy job security, critics say.

"I would say 'no' (to a job offered under the law) because I would have no security for two years," Jerome Desprol, 24, told Reuters.

DIALOGUE

In a bid to defuse the crisis President Jacques Chirac said on Friday the government was "ready for dialogue" on the law but student groups and unions said his administration must withdraw it before talks can take place.

Analysts say any retreat by Villepin would damage his chances if he runs for the presidency in 2007 and could harm the prospects for his UMP party, headed by Interior Minister Nicolas Sarkozy who is another possible candidate at the election.

In an indication of the possible danger to the government, an opinion poll published in Friday's Le Parisien newspaper showed 68 percent of French people oppose the law, a rise of 13 percentage points in a week.

The dispute has provided a potential rallying point for the opposition Socialists, weakened by divisions over Europe and humiliating defeat in the 2002 election, though commentators say they are yet to capitalize on the opportunity.

Some 71 people remained in custody on Friday a day after student protests led to sporadic rioting including a confrontation at the prestigious Sorbonne university in Paris.

University chancellors met Villepin and called for an immediate suspension of the law while negotiations on youth employment take place and said government efforts to explain the law had been inadequate.

"We told him about our very serious concerns about the situation. We told him that things are getting worse and that next week could prove very risky," said Yannick Vallee, vice president of the association of university presidents.