French President Emmanuel Macron asked Prime Minister Elisabeth Borne to propose a new “government of action” that will be named in early July.
The president rejected Ms Borne’s offer to resign Tuesday, after an election defeat last week when he lost his absolute majority in parliament.
“I decided today to confirm my confidence in Elisabeth Borne,” Mr Macron said in an interview.
The president, who spoke to Ms Borne on Saturday, announced that he had instructed her next week to sound out the political groups in the National Assembly on a number of issues.
They included participation in a government, their position on a vote of confidence in Ms Borne on July 5, and also on the vote on the state budget next autumn.
“On my return from the G7 and Nato, the prime minister will submit to me proposals for a road map for the government of France over the coming months and years, and also for the composition of a new government of action at the service of France that we will put in place in the first days of July,” he added.
“I have confidence in our collective ability to get there. I have confidence in the ability of the prime minister,” he said.
France is facing a political deadlock after opposition parties gave a frosty reception to Mr Macron's call for compromises to keep France governable after an indecisive parliamentary election.
Mr Macron made his plea in an address to the nation on Wednesday days after failing to retain his bloc's overall majority in parliament, a setback that threatens to undermine his ability to carry out his planned reforms.
His centrist alliance finished the parliamentary elections 44 seats short of an overall majority in the National Assembly, as a new left-wing coalition and the far-right made major gains.
The situation undermines Mr Macron's plans for reform in his second term after his April presidential re-election — including a measure to put the retirement age up — and risks denting his international stature.