The panel of seven senators and seven members of parliament is due to meet at 0830 GMT to discuss the text before it heads to the lower house floor on Monday.

The left wing does not have a majority in the panel to block a compromise deal, but it could tip the balance against Prime Minister Francois Bayrou in the lower house, where a vote of no-confidence could be called as soon as next week.

Eric Coquerel from the hard-left LFI party who heads the Finance Commission of the National Assembly, told the TF1 television network there was little suspense over the talks as there were eight parliamentarians from the right and six from the left in the panel.

"Given the power balance, one cannot see how a deal could not be reached," he said, adding the real battle would take place next week in the National Assembly, where his party would back a no-confidence motion.

The attitude of Socialist politicians will thus be key next week and there is uncertainty about what they will do.

Socialist party officials on Wednesday suspended their participation in the talks in protest over remarks about immigration by Prime Minister Francois Bayrou, who said many French people felt "submerged" by immigration.

Failure to pass the 2025 budget has rattled investors while sapping business and household confidence. The government has had to make billions of euros in concessions to forge a bill with a chance of getting passed.

Without a majority, the government may use constitutional powers to bypass lawmakers, which would likely anger its opponents, and even if a deal is struck, French Prime Minister Bayrou might not be out of the woods.

Should the Socialists decide to back the motion to topple Bayrou, he would find himself dependent on the grace of the far-right Marine Le Pen’s troops again.

Bayrou could even fall if she decides to join the Socialists in backing the no-confidence motion.