· Mothers may get €1,000 a month to have third child · High birthrate fails to stop population shrinking

Middle-class mothers in France could be paid up to €1,000 (£675) a month - almost the minimum wage - to stop work for a year and have a third child under a government scheme to boost the birthrate, already among the highest in Europe.

Despite female employment statistics that are the envy of the continent, the government remains worried about the reluctance of better-educated women to have babies. A plan to be unveiled by the prime minister, Dominique de Villepin, today is expected to double an existing cash incentive for big families.

In a Europe facing serious demographic decline, France's buoyant birthrate of 1.9 children a woman is well above the average of 1.4 and surpassed only by Ireland. France can also boast one of the EU's highest rates of female employment: 81% of women between 25 and 49 are in work, including 75% of those with two children (and 51% of those with more than two).

But a recent report by Hubert Brin, the head of the National Union of Family Associations, warned that even France's high birthrate would not prevent the population shrinking. One of the problems is that middle-class and professional women are postponing the age at which they start a family (the 2004 average was 29.6), and spacing out their pregnancies (now nearly four years between the first and second child). As a result, fewer women will have more than two children.

The government hopes to reverse the downtrend by raising an existing €512 monthly grant, the allowance paid to mothers (or, in theory but rarely in practice, fathers) who put their jobs on hold to raise a second or third child.

The grant will be available only for a third baby, and limited to one year. But it will be tied to the parent's salary, with an expected ceiling of €1,000. The French minimum wage is €1,200 a month.

"The old deal only really attracted women in poorly paid work, not those with qualifications and competitive career jobs," said Dominique Meda, a leading social policy specialist. "This one could be that extra encouragement they need to take the plunge. It may even encourage some fathers to take a year off."

France's family policy, launched in the 1970s, aims to improve the country's birthrate and keep as many women in work as possible. "The main point is that women here no longer stop working when they have children: the majority work, even those with three kids," said Ms Meda.

The French state aims to make it easy for working women to have children - either by allowing them to take time off from their jobs without too much of a financial loss, or by providing cheap, high-quality childcare.

Maternity leave, on near full pay, ranges from 20 weeks for the first child to 40 or more for a third. A whole gamut of grants, allowances and tax breaks is available, increasing substantially once a family has three children: all French "familles nombreuses" get some €300 in monthly allowances and travel as good as free on public transport.

At the same time, the network of state-run or state-approved creches - for children from two months old - has been expanded over the past decade or so, as has the number of state-registered childminders. Depending on the family's income, childcare costs from virtually nothing to around €500 a month for the most well-off. Nursery school from 8.30am to 4.30pm is free for every child from the age of three. "We plainly have a very good system compared with many countries," said Sylvie Clarke, 37, a mother of three from Lille. "It's true that, in France, you can have babies without it being a major financial blow, and without worrying whether you'll be able to go back to work afterwards."

Ms Clarke, a bank executive, said she had been able to take up to a year off work for each of her three children because of the generous maternity leave offered by her employer, and so had never considered taking extended parental leave.

"It didn't appeal to people earning much more than the minimum wage," she said. "So it's plain that by raising the ceiling they'll interest a whole new group. But I'm not sure that women in really highly competitive jobs, where presence is everything, will be tempted. And at the end of the day, it's not more money - or rather less of a financial penalty - that makes you want a third child. It's the idea of having a third child."

Around Europe

Sweden

Family benefits: Each parent entitled to 18 months leave; monthly child benefit for three children is €335.74 (£226)

Employment rate of women: aged 25-54

No children 81.9%; one child 80.6%; two children 81.8%

Birthrate: 1.6 children a woman

Ireland

Family benefits: 26 weeks maternity leave plus 14 weeks parental leave; monthly child benefit for three children is €280.6 (£189)

Employment rate of women: aged 25-54

No children 65.8%; one child 51.%; two children 40.8%

Birthrate: 1.98

France

Family benefits:16 weeks maternity leave plus total of 36 months parental leave; monthly child benefit for three children is €390 (£263)

Employment rate of women: aged 25-54

No children 73.5%; one child 74.1%; two children 58.8%

Birthrate: 1.9

UK

Family benefits:26 weeks maternity leave plus 26 weeks parental leave; monthly child benefit for three children is £170.64 (€252)

Employment rate of women: aged 25-54

No children 79.9%; one child 72.9% two children 62.3%

Birthrate: 1.6

Germany

Family benefits:14 weeks maternity leave plus parental leave up to 36 months; monthly child benefit for three children is €430.50 (£290)

Employment rate of women: aged 25-54

No children 77.3%; one child 70.4%; two children 56.3%

Birthrate: 1.5

Portugal

Family benefits: six month maternity leave; monthly child benefit is dependent on earnings

Employment rate of women aged 25-54

No children 72.6%; one child 78.5%; two children 70.3%

Fertility rate: 1.5

· Source OECD