ATHENS (Reuters) - Tens of thousands of demonstrators rallied in front of the Greek parliament on Thursday after violent clashes the previous day as a general strike continued against a deeply unpopular austerity law expected to be approved later in the evening.

Deputies are expected to pass the plan, required by the European Union and International Monetary Fund, after the bill passed a first vote on Wednesday, when protests degenerated into street battles between black-clad rioters and police.

But at least two ruling party MPs have said they might vote against one of the bill's provisions, threatening to weaken the government's narrow majority as it fights a debt crisis that is shaking global markets.

Around 20,000 people assembled in front of the parliament by late morning, many wearing surgical masks against the tear gas and pepper spray still hanging in the air from the previous day and carrying banners with slogans such as "Throw them out!"

The 48-hour general strike called by unions representing around half the Greek workforce is one of the largest protests since the start of the crisis two years ago and brought more than 100,000 people to the streets on Wednesday.

The unrest left central Athens covered in smoldering rubbish and lumps of masonry hacked off buildings in a repeat of clashes seen in anti-austerity protests in June.

Early on Thursday, Sofia Giannaka, a potential rebel deputy, indicated she would probably vote in favor of the provision, which suspends some collective pay accords, but she said she would not accept any more major cuts.

"There will be no next time," she told Greek radio.

The government's majority of 154 seats in the 300-member parliament is expected to see the bill through but any defections would be embarrassing as Athens struggles to convince international lenders to continue their support.

The mix of public sector pay and pension cuts, tax hikes and changes to sectoral wage agreements has roused deep hostility from many Greeks, who say it punishes the weak and will only drive the stricken economy further into the ground.

The cabinet was due to meet around noon with Prime Minister George Papandreou rallying support before a EU summit on Sunday where leaders are hoping for a new plan to stave off bankruptcy for Greece and stop the crisis spreading to the whole bloc.

On the streets in Athens, however, the mood remained angry both against the government and the EU-IMF "Troika," which is expected to approve a new tranche of aid but which has pressed for tougher action from the government.

A spokesman for GSEE, the main private sector union, said strike levels had fallen somewhat on Thursday, as many cash-strapped workers, who lose pay for stoppages, returned to work.

"We expect a lot of people in the rally, to tell the Troika and the government that these policies are devastating both Greece and Europe," said spokesman Stathis Anestis. "They have to finally deal with the problems of people, not the banks."


Analysts expect the protests to continue and there has been widespread speculation the government will fall early, forcing a snap election before the scheduled date in 2013 but Papandreou has repeatedly ruled out stepping down early.

"People sent a message on Wednesday that they have reached their limits and can't take any more austerity," said Theodore Couloumbis of the ELIAMEP think-tank.

"But these kind of protests cannot topple the government," he said. "I don't see this happening now."

The mood appeared calmer early on Thursday, with many shops reopening, but demonstrators said they were determined to continue the protest movement.

"These measures are so tough that we won't be scared by a little bit of tear gas," said Yiorgos Lenas, a 29-year-old civil engineer, his eyes streaming from the residual sting in the air. "People can't take it anymore."

Stuck in its third year of recession and immobilized by a public debt amounting to 162 percent of gross domestic product, Greece is trapped between international lenders demanding tougher action and growing public anger over the cuts.

The bill foresees an average wage cut of about 20 percent for public sector workers, bringing total income losses since the crisis started two years ago to about 40 percent, and reduces the tax-free income threshold.

Wednesday's violence, which appeared to be the work of a hardcore group of mainly younger protesters overshadowed the first day of the strike that shut down much of the country.

Ministries, schools and other public buildings will be shut, transport services will be severely restricted and hospitals will be running on skeleton staffing.

There were smaller protest rallies in other cities across the country but the government vowed to push through the measures, which are needed to obtain the aid it needs to keep paying the country's bills.

"Today, we must arm the prime minister for negotiations that will decide if Greece can pay for wages and pensions, fuel and pharmaceuticals, whether it can continue as an EU member," Education Minister Anna Diamantopoulou told parliament.

(Writing by Ingrid Melander and James Mackenzie; Editing by Sophie Hares)

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