ATHENS (AFP) – Thousands of Greek protesters surrounded the parliament building in Athens on Wednesday as a general strike paralysed the country and the prime minister held emergency talks on a controversial reform package.

Riot police and barricades blocked approaches to parliament as 20,000 people gathered in the capital, summoned by a popular protest group that has occupied central Syntagma Square for weeks after a similar mobilisation in Spain.

Lawmakers inside the building are debating a new austerity package worth over 28 billion euros ($40 billion), a condition demanded by Greece's creditors in return for a badly-needed new aid bailout.

Prime Minister George Papandreou began an emergency meeting with the Greek head of state, President Carolos Papoulias, after a government deputy defected on Tuesday, reducing the government's majority to five seats.

Another party member also recently indicated that he would vote against the government's plan, raising the likelihood the reforms may be rejected.

A similar event in Portugal prompted the collapse of a left wing government followed by snap elections that were won by a right-of-centre party.

Reports said the government may seek to force opposition deputies to shoulder some responsibility for the reform package by setting a minimum majority for its passage of 180 votes in the 300-seat body, 25 more than the ruling party holds.

But Greece's right leaning main opposition party insists it will vote against the measures.

Greece has warned it will be unable to pay next month's bills without a 12-billion-euro loan instalment from the EU and the IMF, part of a broader 110-billion-euro bailout package agreed last year.

But the creditors have warned that no more aid will be forthcoming without firm reform commitments from Athens.

Dozens of police vans were parked in front of parliament to allow the deputies unhindered access and keep at bay the crowd of protesters.

The square opposite the legislative chamber was awash with Greek national and Spanish flags and banners reading "Resist" and the battle cry from the Spanish civil war, "No pasaran" (They shall not pass).

Rallies called by trade unions were due to begin in the late morning.

The general strike, the third this year against austerity, disrupted public transport on land and sea and forced offices to close.

Tension has been rising in Greece in the past few days with protesters voicing their discontent over plans for a new wave of spending cuts and tax hikes.

Many Greeks are angry that additional sacrifices are demanded after billions of euros in spending cuts and tax hikes last year.

"The politicians lied to us," said Maria Chira, a 30-year-old mother of two.

"Greece is in danger, this is the most important mobilisation since the seventies," she said, referring to a student uprising that helped bring about the collapse of a military dictatorship in 1974.

"We no longer have our fates in our hands," added 70-year-old Machi Spyridaki.

"I am here to defend our country's pride and the future of my children and grandchildren who are destined to a life of unemployment and poverty wages," she told AFP.

Eurozone finance ministers failed to reach accord at talks on Tuesday on a second bailout package to avert a Greek default.

Opinion polls show most Greeks have lost confidence in their country's government and a political and judicial system that has conspicuously failed to root out endemic corruption.