By Alasdair Sandford BBC News, Paris

The setback suffered by President Nicolas Sarkozy in the French parliamentary elections looks unlikely to slow up his ambitious reform agenda.

Although his prime minister spoke of the need for consensus and dialogue, Francois Fillon also pointed out that the UMP party had a clear majority, adding that now was the "time to act".

President Sarkozy is not expected to slow on reform

The result "validates a programme to modernise France decisively", he said. The prime minister went on to list the areas where Parliament would be called upon to legislate from July: the workplace; employment; law and order; universities; transport strikes; immigration.

The election result showed once again that the French supported the need for change. But it also suggested that voters did not want the National Assembly to lie down meekly before the Sarkozy steamroller.

Whereas in the first round many left-wing supporters abstained, this time they responded to calls to limit the extent of the executive's power.

Worryingly for the new government, one of its first proposals seems to have contributed to the sudden resurgence of the opposition.

The idea for a "social VAT" to fund the welfare system is designed to shift the tax burden away from the world of work - Mr Sarkozy's main obsession - and onto consumption. But his insistence that a sales tax hike would not reduce people's spending power failed to reassure.

The political left has shown it still has the capacity to mount an effective challenge Send us your comments

"Poorly prepared, poorly presented, poorly defended," was Le Figaro's opinion of the new idea. And this from a newspaper which is one of the president's strongest supporters.

Did the vote at the polls reflect a determined opposition which could soon be felt on the streets, if further reforms meet similar hostility? The 40% abstention rate was virtually identical to that in the first round. Another theory is that the result was largely due to Sarkozy supporters staying away.

They may have believed victory was assured, and were perhaps uneasy over the VAT row and the consequences of a landslide. Either way, the political left has shown it still has the capacity to mount an effective challenge.

Other parties sidelined

In an echo of previously doomed reforms, Alain Juppe, one of the most senior cabinet members, was defeated by his Socialist rival in Sunday's vote and promptly resigned.

He was prime minister in the mid-1990s when the government was brought down by a wave of protest against its reform programme. Mr Juppe's experience then could have been invaluable to the Sarkozy government today.

Alain Juppe's valuable reform experience has been lost

For the Socialists, relief at avoiding a debacle was overshadowed by the news that Segolene Royal and Francois Hollande have split up. The famous "power couple" of French politics is no more; the likeliest scenario for the coming months is now a power struggle.

The defeated presidential candidate and the party leader have already been at odds over policy and tactics. Both intend to play a leading role as the party embarks on a slow, painful reform process.

Ms Royal is keen to take over the party leadership and mould a renewed party in her image. The more traditionalist Mr Hollande said on Monday he intends to remain in his post until his mandate runs out next year.

Despite the emergence of the centrist contender Francois Bayrou as a third force at the presidential election, the parliamentary vote largely confirmed the two-party system. Mr Bayrou's new Democratic Movement (MoDem) looks somewhat isolated with only three seats.