Police fired tear gas at protestors trying to storm the Greek parliament on Wednesday, as mounting anger at brutal spending cuts designed to stave off bankruptcy boiled over during a general strike.
Rioting also broke out in the second city of Thessaloniki where youths pelted stores with rocks and other makeshift missiles, correspondents reported.
Athens underground stations were shuttered and its international airport deserted as around 20,000 union members rallied against the cuts and tax hikes with 14,000 more gathered in northern Thessaloniki, police said.
The strike was the first major test of the Socialist government's resolve to push through unprecedented measures since agreeing an 110 billion euro (143 billion dollars) EU and IMF debt bailout at the weekend.
But despite Prime Minister George Papandreou's insistence that the measures are vital for the nation's survival, the unions flexed their muscles by paralysing public transport, grounding air traffic and preventing ferries from leaving their docks.
After rallying in two separate demonstrations in central Athens, members of the main unions began converging on parliament, where the government was preparing for the measures to be voted on Thursday.
"They're taking everything from me, I don't know how I'm going to get by," said 61-year-old Anargyros Bizianis, a municipal worker in the Athens suburb of Piraeus who earns 900 euros a month.
As the protestors tried to break through a police line in front of the parliament, they hurled stones and bottles of water, prompting the riot squad officers to fire back with tear gas.
The protestors in Thessaloniki targeted stores and banks in the city centre before they were dispersed by the anti-riot police.
Hundreds of thousands of civil servants kicked off the protests on Tuesday and a group of about 200 communists also stormed Athens Acropolis, unfurling banners reading "Peoples of Europe, Rise Up."
"The Greek people have been called to make sacrifices while the rich pay nothing," said the head of the million-member strong GSEE private sector union, Giannis Panagopoulos.
A government official downplayed the walkout saying that "for years there's been strikes and protests in this country without much consequence. We're used to it."
Despite the mounting tensions, political scientist Ilias Nikolakopoulos at polling institute Opinion predicted that "people are going to put up" with the belt-tightening.
"Of course surprises are always possible but I don't believe in an explosion of social discontent," he said.
Pushed to the brink of default, the government agreed at the weekend to slash spending and jack up taxes in return for 110 billion euros (143 billion dollars) in loans over three years from eurozone countries and the International Monetary Fund.
Among the major measures, the government is to cut 13th and 14th month bonus pay for civil servants and retirees; require three years more for pension contributions; and raise the retirement age for women to 65, the same level as men currently.
"Given the scale of the public opposition to the austerity measures it is still unclear whether Greece will ultimately be willing to take years of fiscal punishment and recession to get its fiscal house in order," economist Ben May at Capital Economics said.
"Accordingly, it is still unwise to rule out the government eventually defaulting or restructuring its debts."
After months of hesitation, eurozone countries and the IMF agreed to lend Greece billions at below market rates after concerns that the Athens government's debt crisis could trigger a knock-on effect elsewhere.
Fighting accusations of holding up the bailout, German Chancellor Angela Merkel said on Wednesday the Greek crisis marked a turning point for the European Union, urging an overhaul of its fiscal rules.
"The future of Europe and the future of Germany within Europe is at stake," she told a parliament in a debate on Berlin's unpopular decision to lend 22.4 billion euros in taxpayers' money to Greece.