Beside the barricade of desks and upturned chairs topped with a hanged dummy representing suicidal French youth, Antoine Frisan, an anarchist in a cardigan, sits holding a collection tin.

This is "the till", he says, manning the entrance to the "occupied" arts and social sciences faculty in the Breton capital of Rennes. Behind him, amid the chaos of political posters, is a toaster, a hotplate and bits of bread and sausage. "I make visitors a cup of tea in exchange for any coppers they donate," he says.

his first-year student on a Breton language degree course says his eyes are itching - maybe from the tear gas that police have used all week to dislodge student pickets blocking main roads and railways. "Or maybe it's because for two months solid I've only had five hours sleep a night wrapped in a blanket on the lecture hall floor.

"But I'm not giving up. This is about more than a first employment contract. It's about a general malaise. We've had enough of being the Kleenex generation of disposable youth, shat on by employers and screwed by the government. We need a complete regime change in France - the end of the fifth republic. It's dying before our eyes."

Hall B at the Faculty of Rennes 2 University was the starting point for the mass student movement against the French government's new youth employment law which has plunged the country into crisis. On February 7, thousands of students stormed the building, closing it down and staging a "sit-in".

All classes have been stopped and the building is now run by about 5,000 students. About 200 protesters sleep in the lecture theatres each night. Almost every protest they stage in Rennes ends in clashes with the riot police. On Wednesday, a group of students wearing masks and brandishing plastic guns held a press conference in one of the blockaded lecture halls in front of a sign saying: "We will never disarm."

On Thursday, students invaded the law faculty, which remains open, and ransacked the offices of the rightwing student union that backs the government's new employment law.

Protest village

The president of Rennes 2 University supports the students, however, and has urged all of France's university heads to resign in protest against the government's "first employment contract".

This contrat première embauche, or CPE, is being championed by the prime minister, Dominique de Villepin, who believes it will ease the country's crippling youth employment. He says businesses will be encouraged to take on young workers, safe in the knowledge that they are not bound by rigid employment laws. Anyone under 26 can be sacked after a trial period. This was to have been two years, but the president, Jacques Chirac, has proposed shortening it to one year.

In the heat of protests in Paris yesterday, 10 people were hurt when a car was driven into a group of students near the Sorbonne university. Furious protesters pursued the vehicle and overturned it.

In Rennes, up to 100 students and unemployed people have set up a "protest village" in a central square. One student, Pierre Pennamon, said the "easy hire, easy fire" law would not solve unemployment. "An Anglo-Saxon model won't work in France. It doesn't suit our way of life. Anyway, UK unemployment is not as bad as here. In France, we need big businesses to take some sort of responsibility." Mr Pennamon, from a Breton village, has taken short-term jobs to pay his way through university.

However, he said: "If you take short part-time jobs, the next employers see them on your CV and won't take you on permanently. You're stuck in a cycle with no job security. Young people can't afford anywhere to live, thanks to the rules in France that landlords demand proof that you earn three times your rent. No one with a CPE contract will be able to find anywhere to live."

A political science student, Claire Le Cornec, said: "Young, intelligent people in France are being sacrificed to the alter of liberalism. All we ask for is a decent strategy to deal with unemployment once and for all. But neither the left nor the right in France has produced one."