Prime Minister Jean-Marc Ayrault said Tuesday that France was suspending a new "ecotax" on road transport due to take effect on January 1, after violent protests.
In the latest government backdown on a controversial tax hike, Ayrault said the application of the tax had been put off across the country so the government can listen to opponents.
"Courage is not obstinance, it is listening, understanding," Ayrault told reporters after urgent government talks that followed clashes between police and anti-tax protesters in Brittany on Saturday.
"This is why I have decided to suspend the implementation of this ecotax, to give the time needed for dialogue at the national and regional level," he said.
He insisted however that the decision was "a suspension, not a cancellation" of the tax.
The tax, aimed at encouraging environmentally friendly commercial transport, imposes new levies on French and foreign vehicles transporting commercial goods weighing over 3.5 tonnes.
It came under fire from farmers and food sector workers across the country, but especially in Brittany, where the economy is heavily dependent on agriculture.
Violent clashes broke out between protesters and police in Brittany on Saturday and another major protest was planned for this weekend.
The tax was adopted by Nicolas Sarkozy's centre-right UMP government in 2009, but its implementation has repeatedly been put off.
It was the second time in less than a week that Hollande's embattled government backed away from a tax increase, after on Sunday saying it would not imposed planned tax hikes on savings plans.
Under pressure from the European Union to rein in the state deficit, the government has announced about 3 billion euros ($4.1 billion) in tax increases for next year, but is struggling with widespread opposition to the hikes. (AFP)