French Prime Minister Edouard Philippe on Tuesday announced a six-month suspension of a fuel tax rise which has led to weeks of violent protests.
In a televised address, Mr Philippe said that people's anger must be heard, and the measures would not be applied until there has been proper debate with those affected.
The protests have hit major French cities, causing considerable
damage for the past three weekends.
Three people have been killed and hundreds injured in the clashes since the unrest began in November.
The planned new tax was to increase gasoline price by 4 euro cents per litre from January next year. Gasoline currently costs about 1.42 euros a litre in Paris, slightly more than diesel.