LONDON, Aug 28 (Reuters) - France's 10-year government

bond yield fell slightly on Thursday but remained close to its

highest level since March as concerns about the country's fiscal

path lingered before a confidence vote in the government next

month.

France has found itself repeating last year's market wobble

as Prime Minister Francois Bayrou called a confidence vote for

September 8, seeking the backing of opposition parties for his

plan to cut debt and bring the deficit under control.

But the opposition from both the left and the right have

said they will reject his proposal and look likely to end

Bayrou's time in office, possibly paving the way for new

legislative elections and delaying plans to shrink the deficit.

France's 10-year government bond yield was down

1.5 basis points at 3.5% on Thursday after touching its highest

since March the day before.

The gap between French and German 10-year yields

, a gauge of the premium investors require to hold

French debt, was at 80 bps, close to its widest level since

April reached on Wednesday. Last year the spread touched 90 bps,

its widest level since the euro zone crisis in 2012.

"Near term, we continue to have a negative view on France

and expect further pressure on spreads," Jefferies economist

Mohit Kumar said in a note.

Germany's 10-year yield, the euro zone

benchmark, was little changed at 2.694%.