PRESIDENT Chirac of France yesterday urged the world's seven most powerful economies to seek a third way between US style flexible labour markets and mainland Europe's cushioned work forces.

Launching a two day meeting of Group of Seven economy and labour ministers, he said they must find a "third path" between job insecurity in the United States and the high unemployment in Europe which many blame on its generous welfare system.

"There are two different faces to the threat, unemployment or lack of job security, depending on which side of the Atlantic you look at it," he told ministers from the United States, Canada, Japan, Britain, France, Germany and Italy.

His comments were taken up by other Europeans, keen to bring the average 11 per cent jobless rate nearer to the United States 5.5 per cent without sacrificing too much of their social safety net.

The OECD secretary general, Mr Jean Claude Paye, said he personally would prefer a model closer to the Anglo Saxon world represented by Britain and the United States than that of mainland Europe. "But neither of the two models is entirely satisfactory. The American system is not ideal either," he said.

The forum in the unemployment scarred industrial town of Lille was not expected to come up with any big new joint initiatives, with the Group of Seven still divided between Anglo Saxon free marketeers and more interventionist Europeans.

Germany's Economics Minister, Mr Guenter Rexrodt, said Germany did not need a US style labour market in spite of sluggish growth and record unemployment of 10.3 per cent in contrast to the US rate which is half that of Germany's.

"We need more flexibility in the market but we can't have a US style market for Germany with this `hire and fire' mentality," he said.

There was no sign of major arguments erupting at the talks.

`The sharing of views, approaches, solutions is very important," the US Commerce Secretary, Mr Ron Brown, commented.

Britain's Chief Secretary to the Treasury, Mr William Waldegrave, said there was "generally a consensus about what to do which is to press on with politically difficult macroeconomic reform.

The meeting's impact was reduced by the fact that six of the seven finance ministers stayed away and sent deputies instead.

"It is terrifying. It shows the contempt which they have for employment," the former French socialist labour minister, Martine Aubry, now deputy mayor of Lille, said.