Jobless scorn Jospin's aid offer as cracks begin to show in coalition

The French Prime Minister, Lionel Jospin, appeared to have failed yesterday to halt a spreading protest movement by the unemployed, which threatens to undermine his coalition government.

Mr Jospin offered a new pounds 100m "emergency" aid fund for the long-term jobless and invited leaders of unemployed pressure groups to take part in an investigation of the failings of the French benefit system. But he specifically ruled out the protesters' two principal demands: a pounds 300 end-of-year bonus and a substantial increase in the minimum social payments to those out of work.

Such an increase, he said, would "turn upside down, even explode" the government's entire economic and social strategy, based on "growth and employment". It would cost "tens of billions of francs" and destroy all calculations on public spending this year. Although he did not directly say so, it would also put France outside the fiscal guidelines for the single European currency.

The Socialist premier's announcement, at a televised press conference, was greeted with boos and whistles and cries of "hypocrite" at many of the score or more employment insurance offices occupied by activists all over France. "It's nothing but crumbs as usual... Obviously, he has completely misunderstood our message. The unemployed can't wait any longer," said Serge Havet, regional co-president for the Nord-Pas de Calais region of AC!, one of the three pressure groups running the protest campaign.

At another occupied office at Gennevilliers in the Paris suburbs, a protester said: "Eight billion francs [pounds 800m] for the World Cup, a billion francs for the unemployed. Who's kidding who?"

Mr Jospin made it clear that he expected the protesters to abandon the sit-ins, which have been snowballing since before Christmas, and allow the employment offices to go back to work. The occupations had been legitimate, he said, as a way of drawing attention to the "anxieties and preoccupations" of France's 3 million jobless, including 1.2 million long-term unemployed. But such actions could be justified only for "a while" and the sit-ins should now end.

Leaders of the demonstrations were considering the government's proposals last night but all the indications were that the action would continue. This is the first time that the French unemployed have taken part in a sustained protest movement. One of the problems facing Mr Jospin's government is that - unlike a strike by the employed - there is little incentive for the protesters to go back to doing nothing.

The dispute has already exposed the fault-lines in Mr Jospin's coalition, with Communist and Green ministers publicly cheering on the protesters. The the central problem is that the protests strike at the heart of Mr Jospin's awkward boast to have kept his election promises from last May. He was elected on a commitment to help the unemployed and a pledge not to impose a freeze on public spending to meet the economic and monetary union targets.

His decision to recognise the unemployed pressure groups also annoyed the moderate trades union federations, which regard themselves as the legitimate voice of the jobless.