The energy workers marched through central Paris, and were joined by other public workers - including employees of Air France striking over the government's plans to sell another part of its stake in the company.

When people take to the streets, the government has to draw the necessary conclusions

Marc Blondel Force Ouvriere union head

The demonstration was the first major organised union protest against Prime Minister Jean-Pierre Raffarin's new government, which took over in June after five years of left-wing rule in June.

With unions determined to defend their benefits, the government is anxious to avoid a confrontation of the kind that precipitated the downfall of the last right-wing administration in 1995, correspondents say.

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Former prime minister Alan Juppe's attempts to reform railway workers' pensions led to a mass series of protests and contributed to his electoral defeat in 1997.

March

Police said 40,000 marched from Place de la Nation in eastern Paris to the Place de l'Opera near the centre - although organisers put the number at 80,000.

The workers of energy giants Electricite de France (EDF) and Gaz de France (GDF) were joined by employees of the post office, Paris public transport service and SNCF state rail company from all over the country.

It is by opening up EDF and GDF to capital - not privatising them - that we can create the improved conditions under which public services can be better assured

Finance Minister Francis Mer

But unions say the main goal of Thursday's protests was to support public services in energy and to defend jobs, pay and retirement benefit.

Gas and electricity workers are marking the day with a nationwide strike, which is also being followed by around 20% of workers at Air France.

A union official told Reuters news agency that electricity production had been cut by about 20%.

Thanks to reserve supplies, there have been no power cuts.

The Air France strike has resulted in the cancellation of about 60, mostly domestic flights.

Deficit

The government has embarked on a broad privatisation programme to raise cash, but faces stiff opposition from the public sector's highly unionised workers.

French Finance Minister Francis Mer told parliament on Wednesday that he plans to press ahead with the partial sale of EDF and GDF - which the French state completely owns at present.

The government hopes to float the two utilities by 2004, but promises to maintain a majority share.

France is currently struggling to balance its deficit to meet European Union standards and is hoping to raise billions of euros with the sales.

The government has already sold a part of Air France to investors, and says it is likely to reduce its current stake of 54% by about half.

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