"France is going to take part, starting now, in a vast research and support plan for decarbonised cars, that is to say vehicles with the lowest possible C02 emissions, either electric or hybrid rechargeable cars," he said.

The funds will be taken from one billion euros earmarked to promote environmentally-friendly projects following a major green conference last year.

Sarkozy said he would also extend a tax credit for cleaner cars to utility vehicles and keep the measure in place until 2012.

After touring the Paris motor show, Sarkozy also called for a review of EU subsidies to carmarkers after the United States rolled out a 25-billion-dollar package to help its industry adapt to new emissions regulations.

"We cannot say to our manufacturers 'here's our objective on environmental protection' and at the same time not help them reach them," he said.

The European Automobile Manufacturers' Association (ACEA) said Monday it was seeking 40 billion euros in additional aid to retool and adapt factories to produce more fuel-efficient cars.

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