Rising levies on polluting diesel fuel - put in place to improve air quality and cut climate change - have sparked a larger protest
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* Two weeks in, France's "Yellow Vest" protests going strong
* Protesters see Macron as part of out-of-touch urban 'elite'
* Another demonstration expected in Paris on Saturday
By Richard Lough
BEAUVAIS, France, Nov 29 (Reuters) - Hunched over a burning oil drum on a traffic island, protesters in yellow vests line up to decry France's punishing fuel taxes and spiralling living costs, blaming a president who they see as detached from the everyday struggles of life outside the city.
For two weeks, the anti-diesel tax protests have played out at roadblocks across France, and even on Paris's Champs Elysees, representing one of the biggest and most-sustained challenges to Emmanuel Macron's authority since his election last year.
The unyielding initial response from the 40-year-old president, a former investment banker, has only reinforced a view among the hard-pressed middle-class and blue-collar workers that he is part of an urban elite contemptuous of their world.
Nowhere is that more keenly felt than in small villages, commuter towns and new-build city outskirts, where Macron's move to scrap a wealth tax, increase a social welfare levy and raise fuel duties has deepened a sense of marginalisation.
"In France, there's always existed a divide between the big cities and outlying areas. But these days the gulf is growing wider and wider," protester Stephan Hirelle said.
Macron's 2017 election win upended French politics, bringing to office a political outsider who promised an alienated electorate that his administration would reconnect with the grassroots, create jobs and revive the economy.
A year and a half on, it is a similar vein of anti-establishment anger spurring the yellow vests, a spontaneous protest movement that caught Macron off-guard and could spell trouble for his ambitions in next year's European elections.
Diesel pump prices may have been the trigger, but the protests -- in which adherents don the high-vis jackets all French motorists must carry -- have tapped deeper grievances.
Hirelle and his comrades, who count among them a truck driver, pensioners and blue collar workers, bemoan the decline of French industry, the government's failure to protect local jobs from China's clout, and what they see as the selfish interests of the political elite.
Similar resentments helped propel U.S. President Donald Trump to power and have underpinned populists across Europe.
The unrest has pushed Macron's approval ratings to record lows of barely 20 percent. In surveys, he trails far-right leader Marine Le Pen ahead of next May's European vote.
"There's a total disconnect between him and us," said Jean-Marie Camus as trucks and passing cars blared their horns in support. "What he says counts for nothing. Taxes keep going up. Essentially, it's a declaration of war."
Camus and his comrades are hunkered down on a traffic island sandwiched between a motorway toll station and an out-of-town commercial centre that sprawls along a 1 km strip on the outskirts of Beauvais, a town 75 km (45 miles) north of Paris that is a base for low-cost airline Ryanair.
In a scene repeated across France, the area's hypermarkets and fast-food restaurants have fuelled the demise of artisan businesses in villages that abut new-build estates. Public transport is often scant. The car is king, and costly to run.
Macron has long struggled to shake off the tag of "president of the rich" and the view that he is out of touch.
He has successfully stared down protests over reforms to the labour code, the state railways and pension system that were orchestrated by trade unions and his opponents. But the yellow vest rebellion, which enjoys broad public support, risks being far more dangerous for the president.
On Tuesday he sought to dampen the protesters' anger, offering talks between his government and their representatives.
The next round of fuel tax hikes -- which he says are necessary to fight climate change -- will go ahead in January, but he gave himself room to back down later, proposing a quarterly review of pump prices to ensure the tax is "fair".
"I hear the people's discontent," he said. "I will not allow our energy transition plan to deepen the inequalities between regions and make the lives of citizens in rural areas and peri-urban areas even more difficult."
Protesters on the barricades were unimpressed. Their impression of Macron has been cemented.
On Wednesday, the Jean-Jaures Foundation, a left-leaning think-tank, published a report backing the sentiments driving the yellow-vest movement -- French households are finding it tougher to make ends meet, the report said, with basic pastimes such as trips to the cinema and restaurants out of reach.
"Having to sacrifice such simple pleasures sends a message to these people that they are slowly falling off the bottom of the vast middle class rung," the authors wrote.
For now, the protest movement shows no sign of abating. Another rally is planned for Paris on Saturday, a week after hundreds of protesters clashed with riot police in the capital.
Equally worrying for Macron are signs that public support for the "gilets jaunes" is wide and growing, with three-quarters of people backing the movement, according to an Elabe poll published on Wednesday.
"There has always been a two-speed France," said Thierry Gregoire, speaking at a cafe in central Beauvais where patrons nursed morning glasses of beer. "It's just Macron has accelerated the split." (Reporting by Richard Lough; Editing by Alison Williams)
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