* Regulators to inspect and assess Facebook's internal tools

* Follows Macron-Zuckerberg meeting in May

* Contrasts with Germany's stringent law on hate speech

By Mathieu Rosemain, Michel Rose and Gwénaëlle Barzic

PARIS, Nov 12 (Reuters) - In the first move of its kind, Facebook will allow a small number of French regulators to "embed" inside the company and examine how the social media giant combats hate speech online, President Emmanuel Macron said on Monday.

It is the first time the wary tech giant has opened its doors in such a way, following months of criticism over how it decides what is racist, sexist or hate-fuelled and the methods used to remove illicit material shared on its platform.

Under the pilot, Macron's administration will send top civil servants to the company for six months from January, with the working group aiming to verify Facebook's goodwill and determine whether its checks and balances could be improved.

"It's a world first," an official working in the French presidency said last week. "There's a real risk for them."

"The idea is to make tests and then produce a report that we would intend to make public," the official added.

For Macron, who was speaking at the annual Internet Governance Forum in Paris on Monday, the move is an example of what he has called "smart regulation", which he wants to roll out with tech leaders such as Google, Apple, Facebook and Amazon -- referred to as the "GAFAs" in French.

The move follows a one-on-one meeting with Facebook's founder Mark Zuckerberg in May, when Macron invited the CEOs of some of the biggest tech firms to Paris, telling them that there was "no free lunch" and they should work for the common good.

The identity and number of French regulators that will take part in the project have not been revealed.

A source close to the French ministry for digital affairs indicated they could be seconded from the telecoms regulator and from the interior and justice ministries. Facebook said the selection was up to the French presidency.

It remains unclear whether the group will have access to highly-sensitive material such as Facebook's algorithms or dedicated codes to remove hate speech from the platform.

But the team could end up traveling to Facebook's European headquarters in Dublin and to Menlo Park, California, where the parent-company is based if necessary, the company said.

France's approach to the fight against hate speech has contrasted sharply with that chosen by Germany, Europe's largest economy and a leading advocate of privacy.

Since January, Berlin has required sites to remove banned content within 24 hours or face fines of up to 50 million euros ($56 million). That has led to a perverse situation in which a lot of the removed content is later determined to have been legal, the Elysee said.

Instead France is adopting a more nuanced approach, based on collaboration between private companies and embedded regulators, modelled on what happens in the banking and nuclear industries.

"(Tech companies) now have the choice between something that is smart but intrusive and regulation that is wicked and plain stupid," a French official said. (Reporting by Mathieu Rosemain, Michel Rose, Gwénaelle Barzic Additional reporting by Elizabeth Pineau; Editing by Luke Baker)

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