Le Pen's National Front breaks ground in French elections
In some consolation for Hollande, Socialists retained control of Paris, with their candidate due to become the city's first female mayor.
President Francois Hollande will take soundings on a possible cabinet reshuffle on Monday after the drubbing of his Socialists in local elections handed the far-right National Front victory in a record number of towns.
Provisional results from Sunday's voting showed the protectionist, anti-EU party of Marine Le Pen set to take control of 11 towns across the country, easily surpassing a past record in the 1990s when it ruled in four towns.
At least another 140 towns swung from the left to mainstream opposition conservatives as voters punished Hollande for his failure to turn around the euro zone's second largest economy and above all to tackle an unemployment rate stuck at more than 10 percent.
While Hollande himself, who surveys show is the least popular leader in France's 56-year-old Fifth Republic, will remain in power, the question is whether he will replace Prime Minister Jean-Marc Ayrault, whose government has been accused of amateurishness and of being paralyzed by policy splits.
"This evening is a moment of truth. There is no getting away from it: this vote is a defeat for the government ... and I take my part of the blame," Ayrault told national TV late on Sunday.
"The president will draw the lessons from this vote and he will do it in the best interests of France," he said, without commenting on his own fate.
Provisional results gave the National Front its 11 wins largely in the south of the country, which has a tradition of anti-immigrant feeling, but also in northern and eastern districts suffering from France's industrial decline.
The FN's victories included the towns of Beziers, Le Pontet, Frejus, Beaucaire, Le Luc, Camaret-sur-Aigues and Cogolin in the south, and Villers-Cotteret and Hayange in the north. It already made a breakthrough in last week's first round by winning power in the northern town of Henin-Beaumont.
"The glass ceiling has been shattered," said Le Pen, who has sought to make her party more acceptable to French voters. "No one can seriously deny this has been a huge victory for us."
The FN now has a fresh chance to show it can be trusted with power after its attempts to run towns in the 1990s were widely judged to have exposed its failings, hurting its electoral fortunes for years afterwards.
Presidential aides said Hollande was due to see both Ayrault and the centrist Interior Minister Manuel Valls, who polls show is the favorite of most French to take the premiership, during a busy day of closed-door consultations at his Elysee Palace.
Finance Minister Pierre Moscovici, one of half a dozen ministers whose jobs are widely tipped to be on the line, said the government had to demonstrate a greater commitment to social justice and job creation even as it pushed tough reforms.
"This is the price of the brave reforms that have been undertaken," he said of pension reforms and tax hikes brought in by Hollande in a bid to narrow France's public deficit.
"We cannot, and we shall not, remain deaf to the message the French have sent us."
Such comments will raise eyebrows among some of France's European partners and the European Commission, which has urged France to accelerate efforts to deal with its high level of public spending and free up its regulated economy.
A government source said after last week's first round of voting that Paris was preparing tax breaks for households, raising questions over whether France can fulfill a promise of bringing its public deficit down below the EU target of 3 percent of gross domestic product from an estimated 3.6 percent this year.
In some consolation for Hollande, Socialists retained control of Paris city hall, with their candidate Anne Hidalgo due to become the first female mayor there.
But they were set to cede power in cities such as Toulouse, Angers and Quimper, while the conservative UMP saw off a challenge to its rule in the port of Marseille, although the FN won in the city's seventh district.