The report is part of a review of the situation in all the 40 member-states of the Council - a pan-European body that promotes democracy and human rights.
'Intolerant attitudes'
The report says: "France is still suffering from frequent and sporadic outbursts of racist activity, including some anti-Semitic incidents, as well as continuing discrimination in many fields of social and economic life."
The large Muslim community in France "is particularly the subject of intolerant and discriminatory attitudes" says the report, noting also acts of anti-Semitism.
The report describes the National Front as one of the most powerful extreme-right parties in Europe, "which presents an openly racist and xenophobic ideology."
The BBC correspondent in Paris, Stephen Jessel says the conventional non-extreme French right seems to be split on the question of what its relationship should be with the National Front.
Some on the right both in the UDF and the RPR parties are prepared to form alliances with it.
As the ECRI report notes, France has long been a land of immigration. One French person in four has a foreign-born parent or grandparent.
But, our correspondent says the National Front has successfully exploited resentment against outsiders and France's tradition, as a land of welcome to foreigners is moribund if not actually dead.
ECRI's report on other countries
The report on Bulgaria notes particular problems with the treatment of Roma/Gypsies and the effects of a growth in trafficking in human beings.
ECRI notes that although Italy had in the past experienced a relatively low number of racist incidents compared to some other European countries, recent years have seen an increase.
Holland, says the report, "in common with societies elsewhere in Europe, recent years have seen a hardening of attitudes towards 'foreigners' in public debate and public opinion, although support for extreme right-wing parties and the incidence of racial violence are still relatively low."
Portugal is a generally tolerant country, but ECRI asks for more attention to be paid to the situation of illegal immigrants and to tackling acts of violence by extremist groups.
Slovakia was found to be facing problems with discrimination against traditional minority groups - in particular the Hungarian national minority and the Roma/Gypsy community.
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