President Jacques Chirac on Monday threw out part of a youth labor law that triggered massive protests and strikes, bowing to intense pressure from students and unions and dealing a blow to his loyal premier in a bid to end the crisis.

Unions celebrated what they called "a great victory," and also were deciding whether to keep up the protests. The top two student union UNEF and FIDL said they would press on with demonstrations Tuesday across France.

Prime Minister Dominique de Villepin, who devised the law, had faced down protesters for weeks, insisting that its most divisive provision — a so-called "first job contract" — was necessary to reduce high unemployment rates among French youths by making it easier for companies to hire and fire young workers.

But acting on advice from Villepin, his longtime protege, Chirac "decided to replace" the provision with one aimed at "youths in difficulty," the president's office said.

Top lawmakers from Chirac's ruling conservative party presented a new plan to parliament Monday. The proposal emerged after legislative talks last week with unions and student groups to find ways to end the crisis.

A somber Villepin, in a TV appearance, said his original legislation was designed to curb "despair of many youths" and strike a "better balance ... between more flexibility for the employer and more security for workers."

"This was not understood by everyone, I'm sorry to say," Villepin said.

The crisis has discredited Chirac and devastated Villepin and his presidential ambitions — and thrown into question the government's ability to push through painful reforms to help France compete in the global economy. The new measures increase the government's role in the workplace instead of decreasing them, as Villepin had sought.

Students and other opponents had feared the previous measure would erode coveted job security — and some unions trumpeted the retreat by Chirac and his prime minister.

The labor law "is dead and buried," said Jean-Claude Mailly of the Workers Force union. "The goal has been achieved."

Alain Olive, secretary-general of the UNSA union, said, "After more than two weeks of intense mobilization, the 12 syndicated groups of workers, university and high school students have won a great victory."

UNEF leader Bruno Julliard told AP Television News that the students "want to see how we can take advantage of this power struggle that is now in our favor to garner new victories."

The new four-point plan sent to parliament would bolster existing job contracts, rather than enact new ones. The government would offer more state support for companies that hire young workers.

Other provisions would increase internships in areas where jobs are relatively plentiful — such as in restaurants, hotels and nursing — or guide jobseekers in their careers.

Some 160,000 youths would be affected by the new measures this year, at a cost of some $180 million to the state.

The "first job contract" would have allowed employers to fire workers aged under 26 at any time during a two-year trial period without giving a reason.

Chirac enacted the law earlier this month, but immediately suspended it to give ruling conservative lawmakers a chance to meet with unions and look for a way out of the turmoil.

Villepin drew up the labor legislation as part of his response to last fall's rioting in France's impoverished suburbs, where many immigrants and their French-born children live. The unemployment rate for youths under 26 is a staggering 22 percent nationwide, but soars to nearly 50 percent in some of those troubled areas.

The plan sparked weeks of protests and strikes that shut down dozens of universities, prompted clashes between youths and police, and tangled road, train and air travel.

At least five demonstrations since early March drew more than 100,000 people, culminating in two that each brought at least 1 million to the streets across France in the past two weeks. Many ended in violence as youths threw stones, bottles and other projectiles at riot police, who responded by firing tear gas and swinging batons.

Unions had been threatening more demonstrations and walkouts just hours before the announcement from Chirac — and some students appeared unwilling to abandon their protest right away.

"We must go forward carefully," said Lise Prunier, an 18-year-old biology student at the University of Paris-Jussieu. "For the moment, our movement will continue."

Villepin, widely seen as a potential candidate for next year's presidential elections, has suffered heavy blows to his popularity over the crisis.

A new poll showed that 85 percent of French people think the crisis has also weakened the 73-year-old Chirac, in power for 11 years. The poll was conducted by the CSA polling agency last week among 1,005 respondents and gave no margin of error.