French Prime Minister Dominique de Villepin has lost his battle over a controversial youth job law that sparked months of unrest. French President Jacques Chirac announced on Monday the CPE or First Job Contract would be replaced with measures to help the most disadvanged. “I wanted to put forward a strong solution,” said Villepin, “because I am convinced that in addition to the state’s obligations, only a better balance between flexibility for employers and job security for workers will allow us to cut unemployment in our country.”“Not everyone understood that and I regret it,” he added. The new measures include increased financial incentives for employers to hire people under the age of 26 who find it hardest to get a job. The plan would be financed by an increase in tax on tobacco and could be introduced as early as Tuesday according to senior politicians. The crisis has sent Villepin’s ratings plunging, seriously jeopardising his chances of becoming the conservative candidate in next year’s presidential election. A protest march planned in Paris for Tuesday is expected to be an indicator on whether student anger has abated over the crisis.