Video | Greek PM expected to reshuffle cabinet amid pressures to avoid default

Papandreou must pass the new 5-year campaign of tax rises, spending cuts and sell-offs of state property to receive a new EU/IMF bailout and a €12 billion aid tranche that Athens needs to pay back debt that matures in August.

Papandreou may seek to replace his finance minister, George Papaconstantinou, the main architect of hugely unpopular budget cuts demanded by the EU and the IMF as part of Greece's 110 billion euro bailout last year.

The reshuffle underscores the tenuous political and popular support for the new deal, but analysts say Greece has no choice but to carry on with the austerity measures or face default.

World stocks and the euro slumped yesterday as the upheaval fed fears of a default. They fell further in Asia this morning after a Dutch newspaper quoted ECB policymaker Nout Wellink calling for a doubling of the European bailout fund.

He said the fund should be increased to €1.5 trillion if politicians want private-sector investors to participate in a second bailout of Greece.

Former ECB Vice-President Lucas Papademos is most frequently cited as a candidate to replace Papaconstantinou, who local media have said may be on his way to the Foreign Ministry.

Thousands of activists and unionists converged on Athens's central Syntagma square on the parliament's front steps yesterday to try to stop lawmakers from debating the measures in committee that they hope to pass by the end of the month.

Stun grenades boomed around the square and plumes of smoke rose from burning garbage bins as police fired teargas and fought running skirmishes with scores of youths who fought back with rocks and long clubs.

One group hurled petrol bombs and clashed with police at buildings housing the Finance Ministry, also on the square. Reuters witnesses saw flames in front of an entrance to the main building and a similar clash a few buildings down.

About 1,500 police closed a large part of the city centre and created a corridor to hold back protesters as lawmakers drove up to the building in official limousines.

The Health Ministry said 33 people were injured. Fifteen people were arrested, police said. Police officials said the crowd reached around 30,000 but they often underestimate numbers.