(Updates throughout)

By Brian Love

PARIS, Sept 7 (Reuters) - French trade unions said 2.5million people took to the streets on Tuesday to protest overpension reforms that President Nicolas Sarkozy says he isdetermined to implement on the way to elections in 2012.

Tapping into mounting unease over austerity as Europeemerges deeply indebted from recession, French union leadersdemanded the centre-right government heed their call tobacktrack or run the risk of an escalation.

"If they don't respond and they don't pay heed, there'll bea follow-up and nothing is ruled out at this stage," BernardThibault, leader of the large CGT union, told a Paris rally.

Millions of commuters across the British capital alsostruggled to get to work as a 24-hour strike by workers onLondon's underground rail system crippled much of the network,hurting the city's convalescent economy.

The French strikes cut national rail services by 50 percentor so and disrupted underground train services in Paris but notas much as first feared. One in four flights at Paris airportswas cancelled.

Some 2.5 million people protested in all, according to aCFDT union spokesman, topping the two million the unions sayparticipated in June for a previous protest. The officialestimate from the interior ministry, which is always far lowerthan organisers' tallies, was 1.1 million.

In the riviera coast city of Nice, one of myriad protestsnationwide, protesters brandished banners to say: "Our pensionsare ours. We fought to earn them, we will fight to keep them."

Analysts said the large protest turnout would probably notbe enough to secure much more than marginal concessions beyondthe essentials of what many regard as the flagship of Sarkozy'sfive-year term, which ends in early 2012.

Those essentials are a rise to 62 from 60 in legal minimumretirement age, and a rise to 67 from 65 in the age at whichpeople are entitled to retire on a full pension, al part of aplan to balance the finances of the system by 2020.

"For the unions, today is a victory in terms of turnout,"said Jean-Francois Doridot of the opinion pollsters IPSOS.

"But the point is to make progress on the draft law, to makechanges to the text, which they will have difficulty doing. Sowe can talk about a victory that is symbolic, rather than real."

As protesters marched, Labour Minister Eric Woerth, batteredby a scandal over alleged conflicts of interest and illegalpolitical donations, defended the pension reform bill inparliament, which is due to adopt the bill next month.

A question session in the National Assembly, the lower houseof parliament, was briefly halted as Communist deputies staged aboisterous protest in front of the beleaguered minister.

Opinion polls show two-thirds of voters think Sarkozy's planis unfair, but the same number thinks the strikes will make nodifference.

"Never in polling history have the French people been soconvinced that there's a social injustice," political analystRoland Cayrol, from Paris's Sciences Po institute, said.

With Sarkozy's approval ratings close to all-time lows, thegovernment is under pressure to cede some ground, and Woerthrepeated that the reform could make allowances for people injobs where the wear and tear is extreme over time.

France's strikes mostly were in the public sector but some700 steel workers downed tools at an Arcelor Mittal plant innortheastern France to highlight that side of the problem.

"We work 365 days a year in extreme conditions. Dust andnoise means we are wearing ourselves out and going beyond 60years old will send us to a certain death," Edouard Martin, aCFDT union representative, told I-tele TV.

Senior Sarkozy advisers hinted on Sunday he could makefurther concessions beyond the pension bill itself, such asamending a widely criticised "tax shield" put in place to ensurethe wealthy do not pay more than 50 percent of their income tothe state.

The labour unrest mirrors action in other European countriesagainst austerity measures as governments strive to reduce thedebts run up in the recession of 2008-09.

Governments in Greece, Spain, Italy and Romania have so farfaced down strikes to impose painful pay and spending cuts.

Many European countries have an official retirement age of65, and some, such as Germany and Britain, plan to raise itgradually to 67 or beyond. But the real effective retirement agein France is similar to that of its neighbours, according to theOrganisation for Economic Cooperation and Development.

France has a tradition of labour militancy although onlyabout 10 percent of workers are unionised, mostly in the publicsector. A 1995 revolt forced former President Jacques Chirac toabandon planned pension and healthcare reforms, and 2006 studentprotests killed plans for a low-wage youth employment contract.

But the mood is different now, with many people acceptingthat longer life expectancy and weaker public finances make araising of the retirement age inevitable.

"Unlike 1995, when similar numbers took to the streets,there isn't the feeling (this time) that they can win somethingout of it," said Sciences Po analyst Cayrol.

(Additional reporting by Elizabeth Pineau, John Irish, VickyBuffery, Nick Vinocur, Thierry Leveque and Gerard Bon, editingby Michael Roddy)