Francois Hollande has threatened to nationalise a plant owned by steelmaker ArcelorMittal (Other OTC: ARCXF.PK - news) in an increasingly heated dispute in which a minister has said the multinational is no longer welcome in the country.
Moments before the meeting between the French president and steel tycoon Lakshmi Mittal, Mr Hollande said that nationalising ArcelorMittal's plant in northeastern France remained on the table.
"The nationalisation is part [...] of the discussion," he said.
The talks lasted an hour, and brought little progress. A presidential statement said that "discussions between the state and the company [would] continue" until Saturday, to try and find a new investor for the site.
Mr Hollande's nationalisation warning came as forty MPs (BSE: MPSLTD.BO - news) from his Socialist party said they favoured a temporary takeover by the French state of ArcelorMittal's plant in Florange.
"Mittal does not respect our country," a joint statement by the parliamentarians said, adding that his interests "were clearly not that of France, of its industrial fabric and its workers."
Mr Mittal is locked in a battle with France over the future of the Florange site in the traditional, but declining, heartland of the French steel industry in the eastern Lorraine region.
Mr Hollande's government has made a priority of protecting jobs as it seeks to revive France's struggling economy.
ArcelorMittal has said that two blast furnaces at Florange, which were damped down for 14 months prior to their full closure, were uncompetitive in a tough trading climate, partly because they are too far from ports for transportation.
The company gave the government two months, which expires on Saturday, to find a buyer for them. The government says it has two offers, but only for the entire Florange site including other facilities which ArcelorMittal wants to retain and keep operating.
It has warned that nationalisation of the Florange facilities would threaten the viability of all of its activities across France, where it employs 20,000 people.
French Finance Minister Pierre Moscovici meanwhile tried to limit the damage to investor perceptions after Industrial Renewal Minister Arnaud Montebourg threatened to nationalise Florange and said ArcelorMittal was no longer welcome in France .
"Everyone can understand that this case is a special one," he said.
"We of course welcome investors on our soil," Mr Moscovici added, stressing that only a temporary nationalisation had been envisaged so far.
Mr Montebourg, who is suggesting that the state nationalise Florange so as to pass the entire site on to a buyer, raised the stakes on Monday, saying France did not want ArcelorMittal in the country any more and was looking for a partner to take over the group's operations at the plant.
"We do not want Mittal in France any longer because they do not respect France," Montebourg told the French financial daily Les Echos .
But Montebourg later tempered his comments, saying he meant he did not want Mittal's methods in France, accusing it of "non-respect of its commitments, blackmail and threats."
Speaking to AFP while visiting a factory near Orleans, Mr Montebourg confirmed a nationalisation was possible.
"A temporary public takeover is a perfectly reasonable option... because it costs nothing to the taxpayer and respects both French and European law," he said.