* French police feared violence if rally had gone ahead

* Tensions running high after death of leftist student in Paris

By Catherine Bremer

PARIS, June 7 (Reuters) - French authorities banned a far-right youth rally set for Saturday in the southern city of Toulouse after the killing of a left-wing student this week sparked alarm over street violence by ultra-right groups.

Toulouse's Socialist mayor had expressed concern about a planned torchlit evening march to commemorate the victory of a Christian army in 721 over Muslims besieging the city, after a clash between ultra-right and far-left youths in Paris on Wednesday led to the death of a 19-year-old student.

Toulouse police headquarters said it had feared a "serious risk of public disorder" if the rally went ahead.

France has been shaken in recent months by scenes of far-right youths hurling bricks at police and smashing cars as they piggybacked on street marches led by conservatives and Catholics against a reform to legalise same-sex marriage.

The sudden visibility of far-right groups is shaking up the already fragmented right-wing opposition, as National Front leader Marine Le Pen seeks to distance herself from them and the UMP conservative party squabbles over whether to embrace or oppose the anti-gay marriage movement.

Hundreds of people gathered on Thursday evening near the site of Wednesday's attack in central Paris, chanting left-wing slogans and paying tribute to Clement Meric, a political science student. Other vigils took place at Meric's university, Sciences Po, in the Latin Quarter of Paris and in other French cities.

Far-left youths in Toulouse plan to hold a daytime rally there on Saturday against what they describe as "fascists".

Meric's head injuries came when he fell against a metal post after being punched by tattooed right-wing youths he had been taunting in a typical clash between the two camps.

BANNING FAR-RIGHT GROUPS?

A member of a group called Anti-Fascist Action, Meric used to hand out tracts against racism and inequality. Reuters television footage showed him at an April rally against the anti-gay marriage movement, standing back from scuffles between police, left-wingers and right-wingers.

His death has sparked calls from opposition politicians to ban France's two dozen or so far-right groups outright, despite the risk that this would drive them underground. The government has promised to look at ways to clamp down on extremism.

"If we don't ban them, things like this will keep happening," hard left leader Jean-Luc Melenchon told BFM television.

Experts estimate there could be some 3,000 people in France belonging to some 30 extreme right groups, which may be turning more radical since Le Pen has sought a more mainstream profile.

Political tensions rose last month when a 78-year-old far-right activist opposed to gay marriage committed suicide at the altar of Notre Dame cathedral in Paris by shooting himself in the mouth.

Seven people who police say belong to a fringe far-right group called the Revolutionary Nationalist Youths have been arrested over Wednesday's incident. The main suspect, a Spanish student, said he had hit Meric but had not intended to kill him. (Editing by Gareth Jones)

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