Although a proposal popular with voters, and one that gave the Socialist president an opportunity to reach out to the right, the constitutional reform failed to find the necessary support of both houses of parliament.
Hollande also abandoned a proposal to insert into the constitution a set of rules governing a state of emergency, blaming the opposition for torpedoeing his plans, even though some members of his own party had opposed them too.
"Parts of the opposition have been hostile to a revision of the constitution. I deplore this attitude," Hollande said after a weekly cabinet meeting. "I have decided to end this debate."
The climbdown is likely to further damage Hollande's already low chances of re-election in 2017, said Frederic Dabi at the pollster Ifop.
"It's going to revive the perception of a president who is not determined, who lacks authority, whose hand is shaking," Dabi said.
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"It also reinforces the feeling of a term during which reforms have dragged on, got bogged down."
A poll by Ipsos-Sopra Steria for Le Monde newspaper, conducted before Wednesday's announcement but published on the same day, showed Hollande would get 16 percent of the vote in the first round of elections, down four points from a month ago.
That would put him in third place and out of the contest should he be standing against Marine Le Pen of the far-right National Front on 27 percent, and Nicolas Sarkozy of the mainstream right on 21 percent.
The passport initiative hit a big snag last week after the opposition-controlled upper house of parliament approved a different version from the one adopted by the Socialist-controlled lower house.
To change the constitution, the proposal needed to be approved by each house in exactly the same terms.
While the government's version was meant to apply to any French person, the Senate sought to address the fact that stateless persons cannot be expelled from the country, by restricting the law to those with dual nationality.
Critics say that would have created two categories of French citizens - those that could have their citizenship revoked and those that could not - something that they said could fuel racial tensions.
Putting forward his plan three days after the shootings and bombings of Nov. 13, Hollande won a standing ovation at a rare joint meeting of both houses in the Palace of Versailles.
But after the shock of the attacks began to fade, many on the left of the ruling Socialist party criticized the measure.
The most spectacular consequence of the rift within the party was the resignation of Hollande's justice minister, Christiane Taubira.
"The president is being dealt a blow by his own political friends," a former prime minister and conservative senator, Jean-Pierre Raffarin, said on iTele. "The president's authority over his own troops is being challenged."
