An anti-austerity demonstration by more than 80,000 people in Athens degenerated into violence as hundreds of protesters clashed with riot police ahead of a crucial parliamentary vote on new spending cuts.
The vote is the toughest test yet for the country's fragile four month-old coalition government, which must pass the 13.5 billion euro (£10.78bn) package of measures to ensure Greece continues receiving bailout loans and avoids bankruptcy.
"Today we must confirm Greece's new credibility," said Prime Minister Antonis Samaras. "We choose whether we want to stay in the eurozone ... or return to the drachma. That is the choice."
The measures will pile more pain on the Greeks, who have suffered wave after wave of spending cuts and tax hikes since their government revealed in 2009 that public debt was actually far higher than officially declared.
Earlier hundreds of rioters hurled rocks and petrol bombs at lines of police guarding Parliament, who responded with volleys of tear gas and stun grenades, and the first use of water cannon in Greece in years.
Some in the 80,000-strong demonstration, which braved sometimes torrential rain, ran for cover as running battles broke out with police on the second day of a 48-hour general strike. Clouds of tear gas rose from Syntagma Square.
The austerity package is expected to scrape through when the vote is held later tonight. But any defections or abstentions could severely weaken the conservative-led coalition formed in June.
"Today we face the most critical decision any government has taken in the past 37 years," Mr Samaras said. "Many of these measures are fair and should have been taken years ago, without anyone asking us to.
"Others are unfair - cutting wages and salaries - and there is no point in dressing this up as something else," he said, adding that the country was, however, obliged to take them.
The alternative is bankruptcy, triggering financial chaos as the country would likely have to leave the 17-country euro bloc.