PARIS (Reuters) - French Prime Minister Jean-Marc Ayrault delighted business and angered labor leaders on Tuesday by suggesting the 35-hour work week was not sacrosanct, although he stressed the Socialist government had no plans to change it.

The comment came ahead of a government-commissioned report to be unveiled next Monday on proposals to boost the flagging industrial competitiveness of Europe's second largest economy.

The shift to a shorter work week was the flagship reform of the Socialist government that ruled France during a boom at the end of the 1990s. Many employers say it bloated labor costs and blunted their ability to compete in world markets.

Asked if it could make sense to revert to a working week of 39 hours, Ayrault told Le Parisien newspaper: "Nothing's taboo. I'm not dogmatic ... The only thing that worries me is that France has broken down and we need to restart with the engine firing on all cylinders."

Ayrault, whose five-month-old government has been criticized for a string of communications gaffes, later clarified his remarks after business and union leaders seized on them as signaling a major policy shift.

"I said nothing was taboo. But this is simply not a cause the government advocates. There will be no rolling back on the 35-hour week because it is not the cause of our difficulties," he told French radio.

Laurence Parisot, head of the Medef employers federation, had earlier hailed Ayrault's initial comments as "excellent news" while trade union leaders were up in arms.

"If the government tries to take on the 35-hour week, it will run into us on the road," Francois Chereque, head of the large CFDT labor union warned.

The gradual introduction of the shorter working week was intended as a socially progressive move and to encourage employers to hire more staff by making higher overtime costs kick in after an employee had worked 35 hours in a given week.

Nicolas Sarkozy, the conservative president unseated in May by Socialist Francois Hollande, offered overtime tax breaks to lessen the impact of the measure but did not try to repeal it.

(Reporting By Brian Love and Jean-Baptiste Vey; editing by Mark John)