The referendum's result is a bitter blow for Paris

Almost 51% of the Mediterranean island's inhabitants said no to a plan to create a single regional assembly with the power to levy taxes and greater control over public services. Just over 49% supported the move.

The government in Paris had campaigned hard for a "yes" vote, arguing that the new assembly is the best way to ensure that Corsica remains French and also to put an end to separatists' violence that has gone on for nearly 30 years.

Interior Minister Nicolas Sarkozy announced the decision to maintain the status quo. He said "the government will respect their choice", but called it "a wasted opportunity".

The status quo will remain - it has thus been shown once again how difficult the path of reform is in Corsica French Interior Minister Nicolas Sarkozy

The BBC's Caroline Wyatt in Paris says that presumably the result will mean the continuation of the separatists' campaign for full independence.

Over 60% of eligible voters took part in the poll the ministry said, in which the No campaigners garnered 50.98% of the vote versus 49.02% for the Yes camp.

Separatists' voice

The French Government argued that merging Corsica's two existing administrative regions into one with a single assembly would allow the island to speak with one voice.

Colonna's timely arrest shows the authorities will not tolerate separatist violence

Many Corsican nationalists were also in favour of the idea, believing that such an assembly could be the first step towards full independence.

But some Corsicans feared that if they voted "yes", the assembly could be dominated by the separatists, even thought opinion polls show most on the island wish to remain French.

Our correspondent says regardless of the result many on Corsica hope the referendum has focused minds in Paris on the island's real needs.

Corsica's economy is heavily dependent on France, with about 40% of Corsicans being employed by the French Government in the island's current administration.

Our correspondent says independence would leave Corsica unable to support itself on tourism alone.

Corsican 'Robin Hood'

She says some on the island believe it is no coincidence France was able to announce the capture of its most wanted man, Yvan Colonna, just before the vote.

He was wanted in connection with the murder of the most senior French official on Corsica, Claude Erignac, in 1998.

The murder was the highest profile assassination by Corsican separatists. Eight other Corsicans are already on trial in Paris for aiding and abetting the murder.

Yvan Colonna, portrayed by the separatists as a kind of Robin Hood figure had apparently been hiding on Corsica for the past five years.

He was finally discovered in a shepherd's hut in Porto-Pollo and the French Interior Ministry says the next few days will see more revelations about who helped him to escape trial for so long.

Our correspondent says that Mr Colonna's capture is a signal from Paris that the government will continue to pursue those suspected of involvement in violent separatist campaign.