For the past week, riots led by now-banned TLP group have engulfed Pakistan, with police officers killed and taken hostage and the French embassy advising its citizens to leave the country.
Pakistan's government will ask parliament to decide the fate of the French ambassador, apparently appeasing a militant group which had threatened more protests unless the envoy was expelled.
Interior Minister Sheikh Rashid Ahmed said on Tuesday a resolution on the diplomat would be presented to the National Assembly, the lower house of parliament which next meets on Thursday, and that Tehreek-i-Labbaik Pakistan (TLP) had agreed to "call off its protest sit-ins from the entire country".
"After long negotiations with TLP, this has been agreed that we will table a resolution in parliament today to expel French ambassador," said the minister, Sheikh Rashid Ahmad in a video recorded statement.
Officials from the group were not immediately available to confirm the remarks.
Furor over France
The TLP has waged an anti-France campaign for months since President Emmanuel Macron defended the right of a satirical magazine to republish cartoons depicting the Prophet Muhammed, an act deemed blasphemous by many Muslims.
That campaign erupted into bloody violence last week following the arrest of the TLP leader after he called for a march on the capital to demand the French envoy's expulsion.
Lahore police said at least six officers had been killed, while 11 others were held hostage for several hours at a TLP mosque, where hundreds of party supporters are still holed out.
The TLP says several of its supporters died in clashes.
The French embassy last week recommended all its citizens leave the country, and on Monday a source at the foreign ministry said Paris was recalling all non-essential staff and their families.
The Pakistan government banned the TLP on Wednesday, effectively labelling them a terror organisation, and police arrested thousands of protesters during clashes, but Rashid said no action would be taken against them.
"Cases registered, including those under the fourth schedule, will also be withdrawn," he said, referring to charges that fall under anti-terror laws.
Khan walks a tightrope
Prime Minister Imran Khan on Monday pleaded with the group to end its violent campaign to oust the ambassador, saying the unrest was harming the nation.
"It doesn't make any difference to France," he said in a recorded address shown on television.
"If we keep protesting our whole lives we would only be damaging our own country and it will not impact (the West)."
Still, calls for a nationwide strike in solidarity with the protesters were widely supported by mainstream religious groups in Lahore and Karachi Monday, with many shops and markets closed and some transport services halted.
Few issues are as galvanising in Pakistan as blasphemy, and even the slightest suggestion of an insult to Islam can supercharge protests, incite lynchings, and unite the country's warring political parties.
Analysts say Khan's policy of appeasement is risky.
"I think the prime minister has realised that appeasing the radical forces isn't an easy task because when you try to please them they demand more and more," security analyst Amir Rana told AFP.
"So far he has failed to maintain the balance."
"There is no doubt there is a bind," said political analyst Mosharraf Zaidi.