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Marine Le Pen's far-right National Rally (RN) party scored historic gains to win the first round of France's parliamentary election, but the final outcome will depend on days of alliance-building before next week's runoff vote.

The RN and allies had 33% of the vote, followed by a leftwing bloc with 28% and President Emmanuel Macron's centrists with just 20%, official results from the interior ministry showed on Monday.

That was a huge setback for Macron, who had called the snap election after the RN trounced his ticket in the European Parliament elections last month.

However, whether the anti-immigrant, eurosceptic RN can form a government will depend on next week's decisive round and how successfully other parties thwart Le Pen by rallying around the best-placed rival candidates in constituencies across France.

Leaders of the left-wing New Popular Front and Macron's centrist alliance made clear on Sunday night that they would withdraw their own candidates in districts where another candidate was better placed to beat the RN in next Sunday's runoff.

For many in France, the RN has long been a pariah, but it is now closer to power than ever. Le Pen has sought to clean up the image of a party known for racism and antisemitism, a tactic that has worked amid voter anger at Macron, the high cost of living, and growing concerns over immigration.

An RN-led government would raise major questions about the direction of the European Union, given its resistance to further integration. Economists have also asked whether its spending plans are fully funded.

The euro touched a two-week high during Asian trading on Monday on market relief the RN had not done better.

"I think it's a slight 'well, there were no surprises', so there was a sense of relief there," said Fiona Cincotta, senior markets analyst at City Index.

RN lawmakers on Monday urged centre-right politicians in the Republicans (LR) party, which received less than 7% of the first-round vote, to withdraw from districts where such a move would benefit RN.

"If they know they're not going to win, I'm calling on them to stand down and let the national side win," RN lawmaker Laure Lavalette told RTL radio.

For now, the Republican party, which split ahead of the vote with a small number of its lawmakers joining the RN, has not indicated its stance.

All candidates who made it through the first round must confirm by Tuesday evening whether they will enter the second.

(Reuters)