* Hollande's left-wing allies outraged by Valls' comments
* Government defends Roma policy as "firmness and humanity"
* Roma row seen major theme in 2014 municipal elections
By Mark John
PARIS, Sept 29 (Reuters) - President Francois Hollande is battling to heal a rift in his ruling coalition over treatment of France's Roma population after his interior minister said most of them should leave France.
Manuel Valls enraged left-wingers in Hollande's government this week by arguing that the vast majority of 20,000 Roma living in makeshift camps outside French cities could never be integrated into society and so should be "taken back to the border" for transfer back to Romania and Bulgaria.
The remarks, widely supported by the public, brought a quick rebuke from European Union authorities which recalled that France was bound by rules on freedom of movement of EU citizens, while human rights groups have warned the comments could stir ethnic hatred.
Hollande's decision to back Valls, whose tough talk on law and order has made him France's most popular minister, has added to discontent among leaders of the French left already dismayed by new public spending curbs aimed at slashing France's deficit.
Housing Minister Cecile Duflot of the ecologist Greens accused Valls of betraying the values of the French Republic and urged Hollande to "heal the wounds" caused by the remarks - an implicit call for him to reprimand his interior minister.
"Until Francois Hollande tells Valls his job is to bring people together rather than to provoke them, it is just not on," Marie-Noelle Lienemann, a leader of the left-leaning faction in Hollande's broad-based Socialist Party, told reporters.
"I think this is weakening Hollande," she said of the impact of the dispute on Hollande's leadership. The president's popularity ratings have already hit a new low of 23 percent in a survey released this week that showed dissatisfaction with his handling of the economy.
Around 10-12 million Roma are spread throughout Europe, according to EU estimates. Countries such as France, Spain and Germany have long struggled to deal with tensions between them and local communities.
Roma is an umbrella term which EU authorities use to refer to semi-nomadic groups including Manouches and Sinti and which number around 300,000 in France - most of them French citizens.
The current row focuses on the much smaller number of Roma immigrants from Romania and Bulgaria housed in some 400 camps on the outskirts of Paris, Lyon, Marseille, Lille and elsewhere.
The far-right National Front has made the issue a top campaign theme for March's municipal elections, warning of a new influx of immigrants when current restrictions on the movement of Romanian and Bulgarian citizens in the EU expire in January.
Hollande's government has been at pains to distance itself from the policy under conservative former President Nicolas Sarkozy, who accused Roma of links to crime and launched a programme of deportations.
Yet since the beginning of the year some 13,000 Roma have been evicted from illegal camps and welfare groups say the failure of schemes to re-house their inhabitants means they find themselves on the streets or simply set up new camps elsewhere.
"It's the same old knee-jerk reaction of trying to find a scapegoat when times are hard," Jean-Francois Corty, who heads activities in France for aid group Doctors of the World (Medecins du Monde), told Reuters.
"But this is putting families on the street, it is putting children in danger," said Corty, whose organisation administers health treatment in camps often with limited access to water and other utilities.
"FIRMNESS AND HUMANITY"
The dispute is not so much over tearing down the large, shanty-town-like camps that have grown up around France but what happens to the Roma once they are evicted.
The official policy is that they should be helped to find new accommodation and granted welfare support. But the European Union has warned that France is not allocating enough resources to ensure that happens - a criticism echoed by Roma themselves.
One Roma woman interviewed by Reuters at a camp in the northern Paris suburb of La Courneuve just before the row over Valls' comments broke said she and her family were only there because they had already been evicted from a nearby camp.
"If they force us to leave here, I don't know where we will go," said Monteana, a 42-year-old mother of four.
Government spokeswoman Najat Vallaud-Belkacem this week defended official policy as a combination of "firmness and humanity" and said Roma returning to their country of origin was just one possible solution.
While there has been no clear sign yet of an all-out revolt over the issue by Hollande's coalition allies the Greens or his other left-wing backers, anger at Valls' comments has rallied his critics.
The Greens' 2012 presidential candidate, Eva Joly, said the row showed the ecologists had more in common with the left of Hollande's Socialist Party than its mainstream and raised the prospect of a creating new partnership between Greens and like-minded left-wingers, including from the Socialist Party itself.
While that plan remains vague, Jean-Luc Melenchon, the head of the Left Party who scored 11 percent in the 2012 presidential election running against Hollande, has expressed interest.
For now, Hollande may consider that Valls, himself the son of Spanish immigrants, has managed to tap into the public mood: a survey by pollster BVA released at the weekend showed 77 percent of French polled agreeing with him.
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