French MPs on Wednesday evening voted in favour of a motion de censure (motion of no confidence) on the government of Michel Barnier - meaning that Barnier is obliged to resign and the government falls.
He will go to the Elysée Palace at 10am on Thursday to present his resignation to president Emmanuel Macron.
You can find the latest developments from parliament HERE.
So then what happens?
Unprecedented situation
The last time that a French prime minister was brought down by a no-confidence vote was in 1962. But back then there was at least a clear majority in parliament.
Never since the start of the Fifth Republic (in 1958) has France faced the combination of a deposed prime minister and a deadlocked parliament.
We have to go back to the chaotic days of the Fourth Republic (1946-1958) to find something vaguely comparable - this was a turbulent period with a dizzying array of different governments, including one prime minister who lasted just nine days in office.
All of which to say, this is an unprecedented situation which makes predictions difficult.
But let's have a go anyway;
The immediate aftermath
The mechanism for a prime minister resigning is that they and their ministers remain in post until a new prime minister is nominated.
They form in effect a caretaker government - ministers are known as ministre démissionaire (resigned minister) - with strictly limited powers. Essentially ministers and the prime minister are allowed to deal with 'current affairs' - any urgent or time-sensitive tasks - but cannot formulate long-term policies or pass new laws.
France had a caretaker government between the parliamentary elections in July 2024 and the appointment of Barnier in September.
In France the president is elected separately to the parliament so Emmanuel Macron remains in post, unless he chooses to resign (more on that later).
What about the budget?
The vote didn't just topple Barnier's government, it brought down with it the 2025 Budget. The contentious budget - containing €60 million in savings designed to deal with France's spiralling deficit - was what sparked the no-confidence vote.
Unable to attract enough support in the divided parliament for the first section of the budget on Monday, Barnier resorted to using the constitutional power known as Article 49.3 to ram the budget through without a vote. This triggered the no-confidence motion voted upon on Wednesday.
The budget has now officially failed, leaving France without a financial plan for 2025.
There are, however, measures in place to avoid a US-style 'shutdown' (in which government employees are not paid) - the most likely option is that the caretaker government requests an emergency 'rollover' of the 2024 budget. This means that the 2024 spending plans would be replicated, at least until a new government can be appointed.
Constitutional experts are divided on whether a caretaker government has the power to request this, but the main opposition parties have indicated that they would support it as an emergency measure.
This would avoid an immediate domestic crisis - but wouldn't address the longer-term problem of the spiralling deficit which is in breach of EU rules on debt. France would face turmoil on the financial markets which could spread to the eurozone.
The Local's columnist John Lichfield writes: "Le Pen claims that she is acting to defend the purchasing power of the not-so-well off. Piffle.
"She says that she is ready to vote for a rollover of the 2024 budget to keep the government from shutting down. But that will bring 380,000 poor families into the income tax net for the first time. The failure to adjust tax bands to inflation will mean that another 3,000,000 people will pay higher taxes.
"France’s borrowing costs on world markets are already soaring. The absence of a proper 2025 budget – likely to last for at least three months and maybe much longer – will prevent increases in defence spending to counter the threat from Russia. It will block action, inter alia, to ease the shortage of doctors in some rural areas."
READ ALSO Will your taxes rise as the government is toppled?
But will there be a new government?
In France the procedure is that the president appoints the prime minister, who in turn nominates ministers, so the choice of a prime minister will fall to Emmanuel Macron.
Clearly not holding out much hope that Barnier would manage to cling on, Macron has reportedly been sounding out names for a new prime minister for the past week.
Some of the names floated in the media include Macron ally and former defence minister Sebastién Lecornu, leader of the centrist MoDem party François Bayrou, former prime minister Bernard Cazeneuve or François Baroin, the mayor of Troyes.
The deeply divided nature of the French parliament makes finding someone who enough MPs will agree to work with is a very tricky task - it took two months of consultation before Barnier was appointed in September. This time there are likely to be even fewer people who are willing to grasp this obviously poisoned chalice.
There is no constitutional deadline for the president to appoint someone, so the process could again drag on for months.
OPINION: Macron will move swiftly to appoint a new PM, but will he succeed where Barnier failed?
Fresh elections
The French constitution states that there must be one year between parliamentary elections - since we had elections last summer that means that the earliest new elections can happen is July 2025.
The government must therefore limp on at least until then.
It's not clear whether more elections would solve the problem anyway - the June/July elections were called to 'provide clarity' to the French political situation, a plan that rather obviously failed.
Elections and polling over the last few years have produced a picture which shows the French electorate split into three blocks - the far-right, the centre and the hard-left. Fresh elections may well produce another parliamentary stalemate.
So will Macron resign?
It's fair to say that many people in France blame Macron for the whole mess - for calling snap elections in July, for failing to create any kind of working coalition afterwards, for refusing to appoint a prime minister of the left, for the creation of a situation in which Marine Le Pen was the parliamentary power-broker . . . the list goes on.
Legally he is not obliged to resign - he was re-elected in 2022 with a mandate until 2027 - but many people are saying that he should.
In the immediate aftermath of the vote, Mathilde Panot of the far-left La France Insoumise said: "We are now calling on Macron to go." She urged "early presidential elections" to solve a deepening political crisis.
Also calling for Macron's resignations is Le Pen herself - she faces being barred from public office if she is found guilty in her ongoing embezzlement trial, the verdict of which is due on March 31st. However, if Macron resigns before March, she would be able to run in a presidential election. She is therefore - for obvious reasons - calling for an early presidential election.
"She could hope, if she won, to be in the Elysée Palace by early February - giving the judges an impossible task when they have to decide whether or not to ban her from politics for five years on March 31st," wrote Mujtaba Rahman, managing director for Europe at Eurasia Group.
So far, Macron has indicated that he will not resign, but straight after the vote on Wednesday that toppled the government his office announced that he will address the nation on Thursday evening.
During the Fifth Republic only two presidents have departed early - Georges Pompidou who died in office in 1974 and Charles de Gaulle who resigned in 1969 after a failed referendum.
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