* Sarkozy says murder suspect should have been monitored
* Judiciary says deprived of resources to meet demands
* Gory murder case gripped nation
PARIS, Feb 7 (Reuters) - French courts faced paralysis when judges started cancelling all but vital business on Monday after President Nicolas Sarkozy accused the judiciary of sloppy work in the case of a gory death that has captivated the nation.
Prime Minister Francois Fillon called a news conference to denounce what he called the "excessive" riposte by hundreds of judges, probation officers and other officials whose work keeps the justice system running day to day.
While strikes in the judiciary are strictly speaking banned, the movement launched on Monday amounts more to a go-slow than a full-scale stoppage, but it could still bring the justice system to a near halt in days if, as the organisers hope, their protest -- due to last at least until Thursday -- spreads nationwide.
At issue is the harrowing tale of an 18-year-old women who vanished weeks ago, police who have found bits but not all of her body and a murder suspect sentenced for crimes 15 times who spent 11 years in jail before being released in February 2010.
Sarkozy incurred the wrath of the judiciary when he said last week that the chief suspect was released from prison without then being monitored, adding: "Those who covered up or allowed this error to happen will be punished, that's the rule."
Unions representing the judiciary called for postponement of all non-urgent court hearings until at least Thursday, when they plan a protest in the city of Nantes, in the western region of France where the dead woman Laetitia Perrais lived.
That means most courtroom and other business -- except emergency hearings of people in preventive custody -- risks being held up, prompting Fillon to call an emergency meeting and a news conference.
Referring to the chief murder suspect, Fillon said: "He was supposed to be followed by the probation services. That did not happen. That is a malfunction, and the consequences are serious enough for the government not to leave the matter there."
Inquiries were under way to see where the blame lay, he said.
Representatives of the judiciary said that the accusations went too far and that the government was depriving them of the resources needed to maintain the standards demanded.
"It's a tidal wave, the entire profession of magistrates is fed up," Virginie Valton, vice president of the National Union of Magistrates, told Reuters. (Reporting by Thierry Leveque and Patrick Vignal; Writing by Brian Love; editing by Tim Pearce)