TheFrenchgovernmenthassignalledthatitisdroppingaplanforataxondomesticcarbondioxideemissions.

    Jean-FrancoisCope,parliamentaryleaderofthegoverningUMPparty,wasquotedassayingthetax"wouldbeEurope-wideornot(exist)atall".

    PrimeMinisterFrancoisFillontoldparliamentthatthegovernmentshouldfocusonpoliciesthatincreasedFrance'seconomiccompetitiveness.

    Francehadbeenrethinkingthetaxafteracourtrejecteditlastyear.

    TheConstitutionalCouncilsaidthereweretoomanyexemptionsforpollutersinthetaxplan,andthataminorityofconsumerswouldbeartheburden.

    ButPresidentNicolasSarkozy'sgovernmenthadstillbeenplanningtopushthrougharevisedversionofthemeasurelaterthisyear.

    Germancompetition

    Hadtheplanbeenapproved,Francewouldhavebeenthelargestcountrytoimposeacarbontaxaspartofeffortstotackleclimatechange.

    "Wehavetoamplifymeasuresthathelpreinforcethecompetitivenessofoureconomy,"MrFillonwasquotedassayingbyReutersnewsagency.

    "Inthatspirit,IwouldliketoindicatethatthedecisionswearegoingtotakeregardingsustainabledevelopmenthavetobebettercoordinatedwithallEuropeancountries,soasnottowidenourgapincompetitivenesswithourneighbourGermany."

    Environmentalagenciesexpresseddi**ayonTuesday,whiletheheadoftheFrenchbusinessfederationMedefexpressedrelief.

    TheEuropeanCommissionsaidearlierthismonththatitwasplanninganEU-wideminimumtaxoncarbonaspartoftheEU'sgreenenergyagenda-thoughtheUKopposessuchamove.