PARIS, August 18, 2008 (AFP) - French Prime Minister Francois Fillon on Monday opened a special government meeting to consider action after new figures showed a sharp drop in growth and compounded worries of a looming recession.

For the first time since 2002, France's gross domestic product (GDP) contracted by 0.3 percent in the second quarter, prompting Fillon to summon ministers ahead of a full cabinet meeting on Thursday.

Economics Minister Christine Lagarde, Trade Minister Anne-Marie Idrac and four other key government members met Fillon to 'analyse the causes' of the slowdown and 'identify responses,' said a statement from the prime minister's office.

No firm action plan was expected to be unveiled following the meeting.

Economists say France will be in a full-blown recession if the growth figures continue to drop in the third quarter.

The Bank of France earlier forecast growth for the third quarter at just 0.1 percent.

The government has maintained it is still hoping to achieve growth of between 1.7 percent and 2.0 percent in 2008, despite criticism from economists who say the actual outcome will likely be closer to 1.0 percent.

The Socialist opposition has called on President Nicolas Sarkozy to go back on billions of euros in tax breaks that were doled out in a fiscal stimulus package adopted soon after his election in May 2007.

'We are not in a recession but we are feeling the effects of a brutal, difficult crisis', said Socialist Didier Migaud, chairman of the parliamentary finance committee.

'The problem is that we have extremely limited room to manoeuvre because we have wasted quite a bit over the past year. So maybe we should have the courage to put the fiscal package back on the table,' Migaud said on France Inter radio.

Consumer Affairs Minister Luc Chatel separately said the government was committed to reform despite the disappointing growth figures.

'This is one more reason to enact reform,' said Chatel.

While the government wants to cut spending, it will not opt for tough austerity measures because 'this would asphyxiate the economy at a time when it frankly doesn't need this,' he said.

The INSEE statistics office on Thursday said output had recoiled under global pressures in the second quarter, contracting by 0.3 percent.

INSEE had previously forecast that the economy would grow 0.2 percent in the second quarter.