He held meetings with students representatives and business leaders on Monday to 'discuss their concerns' and seek compromise.
French President Jacques Chirac has been backing the prime minister over CPE, which allows employers to fire people under 26 for any reason during a two-year 'trial' period. Chirac claims that the law shows the government's willingness to fight youth unemployment but young people and the unions see things differently.
Student groups and union leaders say the CPE would create a generation of disposable workers without job security.
"All the unions are calling to make March 28 a day of demonstrations, strikes and work stoppages," said Rene Valadon, confederal secretary of the Force Ouvriere union after a meeting of France's main unions, student and high school groups.
Villepin claims the ruling party is solidly behind the new law but elements of the party have already dubbed the CPE "Comment Perdre une Election" which translates as "How to Lose an Election".
Opposition to the law is wreaking Villepin's chances of running for president in 2007 and is damaging the ruling UMP party. Opinion polls show popularity has slumped in recent weeks and a poll for the BVA organisation today showed that 60 percent of French voters want the law withdrawn.
"The government must have the wisdom to get out of this impasse which it has imposed on itself. It must withdraw the CPE," said a statement by unions after Monday's decision, adding that only its withdrawal would open the way to negotiations.
The resolve of the protesters is likely to grow even stronger on news that the police are responsible for hospitalising a member of the Sud-PTT union who is now critically ill and comatos. The postal worker was apparently trampled by CRS riot police following Saturday's march through Paris.
His condition is considered to be very serious and he is currently in intensive care. Throughout this affair, the attitude of the police has been scandalous. Not only with their violent behaviour at the time of the demonstration, but with their refusal to call for medical help, as Cyrile lay on the ground, obviously seriously injured.
It was the demonstrators who had to seek medical help for Cyrile. Sud-PTT demand that the attitude of the police must be brought to the attention of the public, as must the complicit behaviour of the government. Sud-PTT denounce in the strongest terms the police violence which has occurred once again at this immense demonstration against the CPE.
On Sunday morning, the police announced the usual hyped up claims of 34 police officers injured. They said that 18 demonstrators had been injured but none seriously. After initial denials and avoidance, the police admit that the 39-year-old man was hospitalised with a head injury in an incident involving police near the Place de la Nation in eastern Paris. A police statement said that the Paris prosecutor's office has opened a preliminary enquiry.
no channel hopping
More at http://www.libcom.org/blog/
Video: http://video.indymedia.org/en/2006/03/291.shtml (sorry, wmv-format)
Drancy is located in Seine-Saint-Denis, a department in the north-western periphery of Paris where the wave of urban violence which struck the French suburbs, last November started.