PARIS - French President Nicolas Sarkozy has stepped in to defuse a row over the abolition of tax breaks for French athletes which has divided his government.
Faced with the fury of French rugby and football clubs and a backlash from his own party, the French president has pushed back by six months the abolition of the controversial "droit à l'image collective" (DIC), a law which allows clubs to treat up to 30 percent of a player's income as "image rights".
The tax law reform, which would overturn a loophole that saves football and rugby clubs millions of euros every year, was voted last week despite the opposition of French Secretary of State for Sport Rama Yade and had been due to be introduced on December 31.
Yade condemned the tax change as "dangerous" for the competitive status of French sport, but was given a public dressing down by both Prime Minister Francois Fillon and Budget Minister Eric Woerth.
The prime minister has insisted that the new law will be confirmed by the Senate although he agreed that its implementation would be put back by six months.
Sarkozy then stepped in to confirm the amendment in principle, but requested "the creation of a think tank to find a solution," the spokesman for the ruling UMP party Frederic Lefebvre told AFP.
"The president took heed of our comments on the fact that you couldn't destabilise the clubs right in the middle of the season. So the idea was to push the abolition of the DIC until the end of the season," said Lefebvre.
"He thinks that we can't accept that most of our champions live outside France and that our clubs can't sign top players," said Lefebvre, adding that the discussions will now get underway with "all the leaders of the sporting world".
The DIC was first introduced in 2004 in reaction to the exodus of top French sports stars overseas and to help clubs compete with their big spending counterparts in England and Spain. It had initally been planned to run until 2012.
As a result French rugby clubs went on a spending spree bringing in top names such as England rugby star Jonny Wilkinson who moved to Toulon, with Stade Francais signing James Haskell and Tom Palmer.
And Racing Metro succeeded in repatriating the hugely popular Sebastien Chabal from English side Sale.
It is feared that its loss will push up the cost of hiring players and hit the competitiveness of French sport.
But for many it was simply another tax loophole which cost the government an estimated 30 million euros a year which could be otherwise used to help amateur sport.