UPDATE 1-French manager blocked in office by angry staff

* Factory manager blockaded in factory

* Workers demand better lay-off terms

* Economic crisis raises social tension in France

* French unemployment rising, new data show

(Adds new quotes, unemployment figures)

By Clotaire Achi

PITHIVIERS, France, March 25 (Reuters) - Workers at a factory operated by the U.S. firm 3M looked set to hold their French manager hostage for a second night in protest against plans to lay off half the staff.

The industrial director of the group, Luc Rousselet, was barricaded in an office on Tuesday evening and workers have refused to let him out until he agrees to more favourable terms for the 110 employees who face the axe.