Lawyers for the counsellors, who had accompanied children from the suburb on a town-sponsored stay at a summer camp in southwestern France, said they might also take the issue to a labour court.
Potential weakness due to Ramadan is also an issue at the London Olympics, where more than 3,000 Muslim athletes are competing. Some have delayed their fast until after the Games while others are fasting as they would any other year.
Muslim leaders presented the case as an issue of religious liberty, while the town's Communist mayor Jacques Bourgoin insisted his concern was only for the safety of the campers.
"This is a discriminatory act," said Abdallah Zekri of the French Muslim Council told BFM TV. "France has religious liberty, it is a fundamental freedom and it must be respected."
Bourgoin said he revoked the suspensions because the public uproar over the issue prevented the calm discussion of safety issues that he planned to take up again later in the year.
"This has been blown out of proportion and we can't discuss it calmly," he told Europe 1 radio on Wednesday. "Many people interpreted this as discriminatory, but we did not take this decision in that way."
MORE CALM AND COMPREHENSION SOUGHT
The mayor's office said in a communique on Tuesday evening that the counsellors' contracts specifically noted they had to make sure both themselves and the children they monitored were regularly nourished and hydrated.
Bourgoin said the town required that because two children were injured in a traffic accident two years ago when a fasting Muslim counsellor fainted at the wheel of the minibus in which she was transporting them.
This requirement applied only to monitors on long trips with round-the-clock responsibility for children, he added.
France is home to about 5 million Muslims, Europe's largest Islamic minority, and disputes between them and local officials trying to apply the country's strict separation of religion and the public service sometimes lead to tensions.
France has banned full Muslim face veils from public spaces and prohibited schoolgirls from wearing headscarves.
The clause in the counsellors' contracts requiring regular meals does not mention Muslims, but it clearly applies to them because they are presumably the only ones who would fast now.
Dalil Boubakeur, rector of the Grand Mosque of Paris, said exceptions to the Ramadan fast would normally be made only for pregnant women and ailing persons.
"French Muslims would resent any infringement of this religious liberty," he said in a communique.
"In this period of Ramadan, French Muslims would hope for more calm and comprehension from the national community."
(Editing by Jon Hemming)