French Prime Minister Jean-Marc Ayrault resigned Valls Hollande
French Prime Minister Jean-Marc Ayrault has resigned Reuters

France's prime minister Jean-Marc Ayrault has stepped down after the electoral debacle suffered by the Socialist Party at the municipal elections.

Ayrault, 64, handed his resignation to president Francois Hollande who is expected to replace him with the more popular interior minister Manuel Valls, 52.

Ayrault's resignations came after the Socialist party lost control of more than 150 towns of more than 9,000 inhabitants to the centre-right UMP party and the far-right Front National (FN) party in two rounds of local elections.

The prime minister had publicly taken responsibility for the bad results.

"I think we did not do enough to explain that the effort to revive the economy that we have undertaken since 2012 was essential for our country," he said.

Hollande, who has been facing a record low popularity, is due to announce a major cabinet reshuffle in a televised address to the nation this evening as part of which a number of ministries are expected to change hands.

Parliamentary sources told Le Figaro that Cécile Duflot, the current minister of territorial equality and housing will not be part of the next government.

Hollande's ex-wife Ségolène Royal has been tipped as new ­education minister.