Most of the 300 people who marched in Paris were allied with political causes rather than motivated by the opposition to the CPE (First Job Contract), withdrawn in the face of protests that saw millions take to the streets across the country.

Late on Tuesday, the parliament was to debate the ruling party's measures to help disadvantaged young people find work a day after the French president, Jacques Chirac, scrapped the CPE - a measure aimed at reducing a youth unemployment rate of 22%.

Opponents of the CPE vowed to keep up their guard until new measures to replace the "easy hire, easy fire" law for young workers had been passed and Tuesday's marchers made fresh demands.

Aurelie Daniel, 23, a law student, said: "Now we want the withdrawal of the entire equal opportunity law." She was referring to wider legislation that includes the CPE.

Unpopular changes

Nicolas Sarkozy, the interior minister, said that the government's U-turn did not mean that Paris was incapable of passing needed but unpopular changes.

"I don't think the French refuse reforms," he told Europe 1 radio. "The French accept change but always want to be assured that it is fair. They found these proposals unfair."

But he said there was little room for change in the twilight of Chirac's 12-year presidency: "You don't reform the same way at the end of an administration as you do at the beginning."

Business daily La Tribune went further, saying that no important reform could be undertaken before a presidential election next year when Chirac is expected to step down.

In sharp contrast to the victory mood among protesters, the president of Medef, a union of business leaders, said the withdrawal of the CPE had shaken economic confidence.

Laurence Parisot praised Dominique de Villepin, the prime minister, for having had the courage to make a link between the rigidity of the labour market and unemployment and said that unions "were wrong to see this as a victory". "After victories like this we will all become losers," he said.