By Mark John and Nicholas Vinocur
PARIS/MARSEILLE (Reuters) - President Francois Hollande's Socialists fear heavy mid-term losses that could jeopardize reforms and the far-right National Front is seen making major gains when voters elect mayors in towns and villages across France from Sunday.
Mayors loom large in French social and political life and the two-round elections are often decided on personality or local issues.
But dissatisfaction with Hollande's rule and a string of legal intrigues involving opposition conservatives are seen hitting turnout and helping the anti-immigrant National Front (FN), which hopes to win outright in a record handful of towns.
Prime Minister Jean-Marc Ayrault called on the opposition conservative UMP party to urge its voters to back Socialist candidates in towns where it stood no chance of election, promising the Socialists would do the same in a joint effort to keep the FN out.
"Those who believe in the Republic must do everything to make sure no town ends up with an FN mayor," he told Radio J.
Heavy losses for Hollande's Socialists could trigger a re-shuffle of his unpopular cabinet and encourage backbench attacks of new pro-business policies on which Hollande has called a mid-year vote of confidence in his government.
"We have to watch out that these town hall votes don't turn into a disaster," said one minister on condition of anonymity.
"The risk is that a big defeat weakens the grass roots of the Socialist Party ... our officials who end up as losers will turn on the leadership."
One Hollande aide forecast turnout of around 55 percent, about 10 points lower than normal.
Acknowledging the failure of efforts to tackle unemployment above 10 percent with state-subsidized jobs, Hollande changed tack in January by announcing plans to cut a total 30 billion euros off French labor costs in a bid to encourage hiring.
Sunday's first-round of voting, with run-offs due a week later, will be the first electoral test of that policy change, which sits alongside public spending savings promised to Brussels to bring France's deficit in line with European Union targets. The deficit is seen at 3.6 percent of output this year and aims to get below the 3 percent target next year.
EYES ON MARSEILLE
Polls show the Socialists are favorite to hang on to Paris where the gaffe-prone efforts of the conservative candidate to lure so-called "bobo" (bourgeois-bohemian) voters have been widely derided on social media.
But the right-wing incumbent in Marseille, the UMP's Jean-Claude Gaudin, looks set to win a new term in France's second city as rival Socialist candidate Patrick Mennucci suffers from his links to an unpopular government.
"Mennucci has committed a crucial mistake which is linking his campaign to the government and allowing us to tell voters: 'if you want to punish the Hollande government, don't vote for Mennucci'," said Gaudin's spokesman Yves Moraine.
Further muddying the waters is the candidacy of Pape Diouf, a former president of the Olympique de Marseille football club who hopes to rally disaffected youths from tough neighborhoods against what he called a Socialist "machine".
The emergence under Marine Le Pen of the National Front as France's third political force adds unpredictability with many of the March 30 run-offs set to be three-way contests.
"The National Front is much less repulsive than it has been in recent years," said Jean-Daniel Levy, an analyst with pollster Harris Interactive. "Voters are not looking for the most competent candidate, but the one who shares their feelings about the state of French society."
Pollsters identify half a dozen FN-run towns emerging after the vote - giving the party a chance to show it can be trusted with power two decades after attempts to run four towns in the 1990s revealed its lack of competence.
"I am looking to build our presence here in the long term," Marion Maréchal-Le Pen, grand-daughter of FN founder Jean-Marie Le Pen and at 24 the youngest parliament deputy in modern French history, said of her campaign in the southern town of Sorgues, a former Communist bastion.
The party is betting on wins in the depressed north, which has suffered most from France's industrial decline, and towns like Tarascon on its traditional southern hunting grounds, where Le Pen has thrown her weight behind a school teacher trying to break a 30-year center-right rule.
Polls show Valerie Laupies, 46, winning in the mediaeval town with 14 percent unemployment and heavy immigration from North African former colonies, where many residents said they no longer felt embarrassed to say they planned to vote for the National Front.
(Additional reporting by Emmanuel Jarry in Paris and Jean-Francois Rosnoblet in Marseille; Editing by Janet Lawrence)