French President Nicolas Sarkozy softened his usually tough stance on Internet regulation at a forum that brought together tech titans in Paris, but stark divisions remained on everything from privacy to copyright.

Sarkozy, who is notorious among techies for creating a law that calls for copyright pirates to be cut off from the Internet, lauded the gathering of executives that included Google Inc's Eric Schmidt and Facebook's Mark Zuckerberg for helping fuel the Arab spring and spurring economic growth.

But he maintained that governments have a role in setting ground rules to limit the abuses and excesses of the Internet, setting up a clash with Schmidt, who said no one would win if some stupid rule stunted the growth of the Web.

As speakers paraded on a stage built in the Tuileries Gardens of central Paris, deep rifts between policymakers and Internet executives became apparent, with few signs of how they would be resolved in the two-day forum.

A draft communique reviewed by Reuters, which is being finalized for release at the conclusion of the forum, suggests that the gathering will paper over the deepest divisions and shy away from making concrete policy proposals.

The draft will urge G8 leaders to adopt an international approach to protecting users' personal data but will sidestep the fraught issue of intellectual property by leaving it largely under the purview of national governments.

Copyright has proven one of the most divisive issues at the forum. Executives from big music and publishing groups have argued for more protection of their works, while Internet executives and activists criticize anti-piracy measures, such as France's anti-piracy law, as crimping the Web's essential open nature.

Yochi Benkler, a Harvard University professor known for championing open source ideas, said governments must be careful about unintended consequences of strict copyright rules.

You can make the Internet safe for Justin Bieber and Lady Gaga, or you can make it safe for the next Skype, said Benkler, referring to two pop music stars and the wildly successful start-up Internet telephony service. You have to choose.

The draft communique tries to split the difference.

With regard to the protection of intellectual property ... we recognize the need to have national laws and frameworks for improved enforcement, while encouraging the development of online trade in goods and content which are respectful of intellectual property, it says.

PRIVACY DEBATE

The question of how to protect users from losing control of their personal data or being tracked by companies for profit was also the source of division at the forum.

Cultural differences between the U.S. and Europe were deep, with Europeans less willing to give up their privacy in exchange for the benefits of new services like Facebook and more willing to turn to regulation than their American counterparts.

Privacy issues are moving center stage after the high-profile hack of Sony Corp's PlayStation network and amid a regulatory review in Europe, which could lead to stricter requirements on Internet companies, such as registering their databases and notifying users of data breaches.

The draft communique doesn't propose any solutions. We encourage the development of common approaches taking into account national legal frameworks, based on fundamental rights and that protect personal data, whilst allowing the legitimate transfer of data, it says.

A delegation of Internet executives are set to travel to the G8 meeting in French seaside resort of Deauville later this week to present the forum's findings to the heads of state.

Maurice Levy, chief executive of advertising firm Publicis, which is hosting the conference, said the group didn't have to resolve the many debates over the Internet's future.

The final document need not be a consensual document, he said. It may present contradictions. It could present disagreements.

(Additional reporting by Matt Cowan and Gwenaelle Barzic; Editing by David Holmes and Gerald E. McCormick)

Eric E. Schmidt Mark zuckerberg Justin Bieber Lady Gaga