Far-right and left-wing lawmakers joined forces on Wednesday to back a no-confidence motion against Prime Minister Michel Barnier, with a majority 331 votes in support of the motion.
Barnier has to tender his resignation and that of his government to President Emmanuel Macron, making his minority government's three-month tenure the shortest lived in France's Fifth Republic beginning in 1958. He is expected to do so on Thursday morning, French media reported.
A screen shows the result of the no-confidence vote against the French prime minister. (EPA PHOTO)
The hard left and far right punished Barnier for using special constitutional powers to adopt part of an unpopular budget without a final vote in parliament, where it lacked majority support. The draft budget had sought 60 billion euros ($A97.98 billion) in savings in a drive to shrink a gaping deficit.
"This (deficit) reality will not disappear by the magic of a motion of censure," Barnier told lawmakers ahead of the vote, adding the budget deficit would come back to haunt whichever government comes next.
No French government had lost a confidence vote since Georges Pompidou's in 1962. Macron ushered in the crisis by calling a snap election in June that delivered a polarised parliament.
With its president diminished, France risks ending the year without a stable government or a 2025 budget, although the constitution allows special measures that would avert a US-style government shutdown.
France's political turmoil will further weaken a European Union already reeling from the implosion of Germany's coalition government, and weeks before US President-elect Donald Trump returns to the White House.
The country's outgoing defence minister Sebastien Lecornu warned the turmoil could impact French support for Ukraine.
The hard left France Unbowed (LFI) party demanded Macron's resignation.
Barnier's political demise was cheered by far-right chief Marine Le Pen, who has sought for years to portray her National Rally party as a government in waiting.
"I'm not pushing for Macron's resignation," she said.
"The pressure on the president will get greater and greater. Only he will make that decision."
French President Michel Barnier's political demise was cheered by far-right chief Marine Le Pen. (AP PHOTO)
France faces a period of deep political uncertainty that is already unnerving investors in French sovereign bonds and stocks. Earlier this week, France's borrowing costs briefly exceeded those of Greece, generally considered far more risky.
Macron must now make a choice. The Elysee Palace said the president would address the nation on Thursday evening.
Three sources told Reuters that Macron aimed to install a new prime minister swiftly, with one saying he wanted to name a premier before a ceremony to reopen the Notre-Dame Cathedral on Saturday, which Trump is due to attend.
Any new prime minister would face the same challenges as Barnier in getting bills, including the 2025 budget, adopted by a divided parliament. There can be no new parliamentary election before July.
Barnier has to tender his resignation and that of his government to President Emmanuel Macron. (AP PHOTO)
Macron could alternatively ask Barnier and his ministers to stay on in a caretaker capacity while he takes time to identify a prime minister able to attract sufficient cross-party support to pass legislation.
A caretaker government could either propose emergency legislation to roll the tax-and-spend provisions in the 2024 budget into next year, or invoke special powers to pass the draft 2025 budget by decree - though jurists say this is a legal grey area and the political cost would be huge.
Macron's opponents also could vote down one prime minister after the next.
