PARIS (Reuters) - French President Nicolas Sarkozy's re-election prospects may have improved after popular former environment minister Jean-Louis Borloo said he would not run for president next April.

Borloo's decision, announced on Sunday night, reduces the risk that the conservative vote will be splintered at Sarkozy's expense in round one of the ballot.

Sarkozy, whose popularity hit record lows in September, will need a strong showing to keep out Marine Le Pen, leader of the far-right National Front party, and make the second round runoff between the top two candidates.

Sarkozy is widely expected to run for a second term, but has made no announcement yet. Borloo has not made clear who he will support in the election.

Farm Minister Bruno Le Maire, who is heading the election campaign for Sarkozy's UMP party, said he would contact Borloo in the coming week or two to see how he could work with the Sarkozy camp.

"There's no room for division," Le Maire said.

The Socialists, the favorites for next year's presidential and parliamentary ballots, hope that Sarkozy might fall before the second round, and tried to counter the impression that Borloo's backers would automatically vote for Sarkozy.

"Voters need to know that it's the first round that will count in the presidential election of 2012," said Francois Hollande, current favorite to become the Socialist candidate for the presidential election.

Pierre Moscovici, a Socialist former minister who is working closely with Hollande, said estimates put Borloo's support at 7-9 percent, and there was no reason for all these votes to go to Sarkozy.

Regular opinion polls indicate that Hollande would win the first round of the presidential contest next April 22, with Sarkozy coming in second to qualify for the May 6 runoff.

But Sarkozy's edge on Le Pen is relatively slim, suggesting that she could still pip him for second place.

Despite Borloo's withdrawal, other potential conservative candidates could draw some of Sarkozy's first-round votes, including former prime minister Dominique de Villepin.

(Reporting by Brian Love; Additional reporting by Jean-Baptiste Vey)