As France is struggling to cut down public debt, its socialist President has caused a political earthquake after appearing to claim on national television that something is not expensive if the state pays for it.

Francois Hollande made the controversial remark as he was discussing unemployment during an interview marking the halfway point of his term.

Responding to a member of the public, who argued that a government plan to cut youth unemployment with subsidised work contracts was not working because of its high costs, Hollande replied: "No, it is the state that pays".

The comment was quickly seized on by his political rivals, who claimed that the socialist president was a spendthrift who wasted public funds.

"Hollande has reluctantly admitted the total ease with which the government ... squanders taxpayers' money," Nicolas Bay from the far-right National Front (FN) said.

An opinion piece in the centre right-leaning national newspaper, Le Figaro, compared the president to gambling addicts who can't help leaving a casino despite sustaining huge losses.

The hashtag "It's not expensive, It's the state that pays" briefly trended on Twitter.

The centre-left establishment then scrambled to defend the embattled president claiming the controversy was pretentious.

Le Monde argued that Hollande was addressing a specific issue and not speaking in general terms.

He was explaining that subsidised contracts were not a burden to local authorities' finances, as they were funded by the central government, according to the newspaper.

The controversy underscored the current sensibility of the French people at the country's woeful economic performance and further damaged the reputation of its leader: Hollande recently saw his approval ratings plummeting to 12%, making him the most unpopular president in French history.

In the same interview Hollande vowed to not seek re-election in 2017 if he does not significantly slash the unemployment rate, which currently stands at 11% across the country.