Prime Minister Edouard Philippe has confirmed that January's planned tax rises on fuel will be suspended for six months, and announced a temporary cap on gas and electricity prices in a bid to cool tensions amid the ongoing gilets jaunes protests.
He also announced stricter vehicle emission controls would also be mothballed and said that stricter contrôle technique tests, which had been introduced in May, would be scrapped.
But he warned that cutting taxes would lead to reductions in spending, as he called for 'more transparency' on the taxation system in France - starting with a three-month nationwide consultation programme.
In an address from Matignon, Mr Philippe said: "Many French people have expressed their anger at roundabouts, tolls... This anger comes from afar, it has been brewing for a long time, it has often remained silent out of modesty or pride. It is now expressed. You would have to be deaf or blind not to see or hear it.
"No tax deserves to endanger the unity of the Nation."
Mr Philippe said: "Three tax measures were due to come into force on January 1: the increase in the carbon tax on petrol, fuel oil and diesel; the convergence of diesel taxation on petrol, and the alignment of diesel taxation for professionals.
"I suspend the application of these tax measures for six months."
Rescinding the fuel tax hike was the key original demand of demonstrators, along with a higher minimum wage - which Mr Philippe said was also in the pipeline - and the reimposition of the wealth tax on high-earners that had been abolished last year.
Mr Philippe also announced a cap on gas and electricity prices during the period of consultation over taxes. They "will not increase during the winter," he insisted.
The Prime Minister had been due to meet with several representatives of the Gilets Jaunes fuel movement today, but they called off the meeting after they reportedly received death threats from extremists.
He added that any future protests should be declared in advance and "take place calmly".
Safety concerns have already prompted the postponement of the Ligue 1 match between Paris Saint-Germain and Montpellier which had been scheduled for Saturday.
"All French people have the right to protest, but all French people also have the right to security," said Mr Philippe. "If there is a new day of protest on Saturday it must take place peacefully."
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