Analysis - "Turning gold into lead": Hollande squanders post-attack bounce

By Elizabeth Pineau and Ingrid Melander

PARIS (Reuters) - French President Francois Hollande has dug himself into a hole over plans to strip dual nationals of their French passports if they are convicted of terrorism, and a looming government reshuffle is unlikely to help him regain lost popularity.

Long France's most unpopular president on record, Hollande saw his ratings almost double when he brought in tough security measures after Islamist militants killed 130 people across Paris on Nov. 13.

Twelve weeks later the boost has entirely evaporated, lost in endless debates and government flip-flops over the dual nationality plan, which has deeply divided Hollande's Socialist party and threatens to hurt his already faltering chances of winning re-election next year.

"We let gold turn into lead," said one minister who asked not to be named as she could not publicly criticise the government she is part of.

"We've given the French people the feeling that was all we were doing," she said. "Hollande's post-attack political successes are backfiring."

The government has acknowledged that the passport-stripping plan is a largely symbolic move that would probably not deter a potential attacker.

Proposing it seemed a good move at the time for Hollande: just three days after the wave of shootings and bombings, he appeared both resolute and consensual when he put forward the measure, favoured by the right, to a rare joint meeting of both houses of parliament. Lawmakers gave him a standing ovation.

Now it has turned into a major headache, drawing heavy criticism from his own camp as the initial shock of the attacks has begun to fade.

DELICATE ISSUE

The question of nationality is a sensitive one for the Left, which has traditionally been generous in offering migrants the right to become French.

In a country where about 5 percent of people aged between 18 and 50 hold two passports, many of them of north African origin, critics are concerned the measure would discriminate against one group of citizens.

Justice Minister Christiane Taubira last week resigned over the proposal, publicly criticising the government, and there have been calls for Hollande to face primaries in the 2017 presidential election rather than standing as the automatic Socialist candidate.

The issue has "set fire to his camp," said Frederic Dabi, an analyst with pollsters Ifop.

It will come to a head on Friday when parliament starts debating a constitutional reform bill that addresses the nationality question and would also make it easier to decree a state of emergency -- a measure the government imposed after the Nov. 13 attacks and is controversially seeking to extend.

But frequent re-draftings of the text have left many unhappy with it, both on the right and the left, meaning Hollande's chances of getting it through are unclear. The two camps want opposite things and he needs them to agree, as a constitutional reform requires a three-fifths majority.

After pressure from Socialist lawmakers, the latest version no longer specifically mentions dual nationals. Yet they would still effectively be the ones targeted: international law bans making someone stateless, so the government could not take away the passport of someone with sole French nationality.

To many on the right that's not strong enough; to critics on the left, it goes too far.

If there is no deal, "it will be a defeat for Francois Hollande, he will have failed to reach unity on such a crucial issue," another government minister said.

RATINGS DROP

Hollande's popularity has dropped by 10 percentage points from a month ago and 24 points from two months ago, an Ifop-Fiducial poll showed earlier this week. It now stands at 26 percent - two points below where it was before the attacks.

Some of this has to do with voters refocusing on economic woes including rampant unemployment. But the government's vacillations over dual nationality "have given the feeling that (Hollande) is struggling to make decisions, which worsens his image problem," said Francois Miquet-Marty, head of Viavoice pollsters.

"It came at the wrong moment, just one year before the presidential election, when Hollande could have rebounded after the attacks and build his reconquest of power from there."

The president's ratings are suffering particularly amid left-wing voters, Yves-Marie Cann of Elabe pollsters said. In a poll published on Thursday, 57 percent of Socialist party voters said they trusted him - down 21 percentage points from January.

Hollande wants to run again in 2017, probably against either former conservative president Nicolas Sarkozy or former conservative prime minister Alain Juppe, and the far-right's Marine Le Pen.

But his tougher security stance has widened divisions on the left, compounding criticism that economic reforms he introduced in 2014 were too stacked in favour of big business.

Hollande is preparing to reshuffle his government soon, as Foreign Minister Laurent Fabius is expected to leave to become the head of France's top constitutional court.

It is not clear if Hollande will simply replace Fabius and a junior minister who also wants to go, or if he will opt for a bigger reshuffle to bring in politicians from other parties and set the government in motion for the presidential election, a senior party official said.

Speculation abounds, including the possibility that Hollande's former partner, Environment Minister Segolene Royal, or his previous prime minister, Jean-Marc Ayrault, could replace Fabius. But insiders say nothing has been decided.

Environmentalist Nicolas Hulot, whom Hollande had sounded out to join his cabinet, said on Thursday he would not accept the offer.

In any case, the reshuffle is not expected to do much to help the government's popularity.

"It could possibly have a major impact if the prime minister or the government's line was to change but that is not expected to be the case," Ifop pollsters' Jerome Fourquet said. "Hollande and (Prime Minister) Manuel Valls have many times reaffirmed the government's more liberal line; it can't change now."

(Additional reporting by Michel Rose and Emmanuel Jarry; Writing by Ingrid Melander; Editing by Mark Trevelyan)