Sarkozy suffers setback as party loses assembly seats

French president Nicolas Sarkozy suffered his first major setback yesterday when his right-wing UMP party won far fewer seats…

French president Nicolas Sarkozy suffered his first major setback yesterday when his right-wing UMP party won far fewer seats than expected in the second round of legislative elections, writes Lara Marlowein Paris.

In the other major surprise of the evening, the defeated presidential candidate Ségolène Royal announced that she and Francois Hollande, the socialist party (PS) leader with whom she has four children, have separated, though she refused to say when their relationship ended.

In a book entitled Backstage of a Defeat, to be published tomorrow, Ms Royal also says she will be a candidate for the leadership of the socialist party if her programme for "renovation" is accepted at a party congress.

Mr Sarkozy's UMP will have between 319 and 329 seats in the new National Assembly, far fewer than the 365 seats it held in the outgoing legislature. Mr Sarkozy had hoped to receive an overwhelming mandate for reform with more than 400 of 577 seats.

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In their worst mistake since they failed to predict that the extreme right-wing leader Jean-Marie Le Pen would make it to the run-off in 2002, French polling institutes had unanimously predicted a "blue wave" victory for the UMP.

Left-wing leaders were jubilant when the results were announced. The socialist party will have between 202 and 210 seats in the new assembly, substantially more than the 149 seats it won five years ago. "The blue wave that was supposed to sweep the country did not happen," Mr Hollande, the socialist leader, said.

The socialists made the need for a balance of power and a probable five-point rise in VAT the main issues over the past week. "June 17th is the final rendez-vous for the next five years," said a statement issued by the party on the eve of the election.

"Afterwards, it's right-wing policies in all their brutality, indifference and injustice . . . We know now who will carry the burden of the fiscal gifts promised by Nicolas Sarkozy."

Mr Sarkozy's setback was symbolised by the defeat of Alain Juppé, the number two in prime minister Francois Fillon's government. Mr Juppé was beaten by a little known socialist candidate, Michèle Delaunay, who won 50.93 per cent of the vote. Under the rules established by Mr Fillon, Mr Juppé will resign today.

Mr Sarkozy had planned to appoint a dozen junior ministers this week, but will now be forced to carry out a more substantial reshuffle. Jean-Louis Borloo, the economy and finance minister who inadvertently launched the outcry over VAT, and Eric Woerth, the budget minister whose statements on a tax break for property loans was corrected by Mr Sarkozy, are at risk.

Mr Fillon last night promised to "respect" the opposition in the spirit of openness and unity advocated by Mr Sarkozy.