The future for French Prime Minister Michel Barnier's government looks bleak, with his struggles to push the 2025 budget through a polarised parliament increasingly likely to end in the toppling of his fragile coalition.

A commission of Senators and members of the National Assembly have hashed out a compromise 2025 budget that, if passed by the both full assemblies, could avoid the government having to force the bill through without a vote.

French stocks and bonds came under fire on Wednesday, driving the premium the government pays for long-term borrowing to its highest since the euro zone debt crisis of 2012, as investors grew uneasy over the fate of the new government and its budget.

A bitter debate is now unfolding inside the ruling class over how to recalibrate its policies, that will confront it, sooner rather than later, with explosive working class opposition.

French Prime Minister Michel Barnier faces a significant political challenge as his budget proposal encounters resistance in a divided parliament. His coalition could collapse if a no-confidence motion is pushed by opponents,

By Harry Robertson and Amanda Cooper LONDON (Reuters) -French stocks and bonds fell sharply on Wednesday, driving the premium the government pays for long-term borrowing to its highest since the euro zone debt crisis of 2012,