Greece faces further unrest ahead of new austerity vote

Running battles between police and some protesters continued overnight in Athens after tens of thousands demonstrated against the cuts.

The measures, including tax hikes and pay cuts, are needed to convince the EU and IMF to continue bailout loans.

Greece is saddled with a huge public debt and an economy in deep recession.

The 48-hour general strike is due to continue on Thursday with workers in virtually every sector of the economy participating.

Air traffic controllers went back to work after a 12-hour stoppage on Wednesday, allowing international and domestic flights to resume.

But civil servants, shopkeepers, dock workers, taxi drivers, doctors, lawyers, teachers, construction workers and others were due to continue the industrial action.

Parliament is expected to approve the articles of an austerity bill after giving it preliminary approval in a first vote late on Wednesday by a margin of 154-141 of the 300 deputies.

At least 100,000 people demonstrated against the measures in Athens on Wednesday. Protesters have said they will rally again on Syntagma Square in front of the parliament while the vote takes place.

The bill includes plans for further cuts to pensions and salaries and temporary lay-offs of 30,000 public sector workers.

Some of Prime Minister George Papandreou's ruling socialist party deputies have threatened not to vote for some of the bill's articles.

With Greece unable to borrow long term on international bond markets to finance its debt, the EU and IMF have stepped in with two bailout packages.

But they have demanded tough action to cut the deficit, which has angered many in Greece who say the medicine is killing the patient.

Finance Minister Evangelos Venizelos described the choice as between a "difficult situation and a catastrophe".

There are fears that if the Greek government defaults on its debts it will set off a chain reaction that could engulf banks and other highly-indebted eurozone nations.

But the government is struggling to convince lenders that it is cutting effectively enough. Greece says it needs the next €8bn of the first bailout agreed to last year or it will soon be unable to pay its bills.

The details of the second rescue plan have yet to be finalised. Banks have agreed to take a 21% loss, or "haircut", on their loans to Greece but there is growing pressure for them to accept higher losses.

European leaders and global finance chiefs are trying to work out a broader plan to tackle the eurozone's debt crisis ahead of a weekend summit in Brussels.

French President Nicolas Sarkozy flew to Germany late on Wednesday to meet German Chancellor Angela Merkel and senior officials from the European Central Bank and IMF.

Neither leader gave any details about what had been discussed.

The two have disagreed about how Europe's bailout fund, the European Financial Stability Facility (EFSF), can be leveraged from its current €440bn to a much higher value in order to bail out banks and struggling countries such as Italy and Spain, if needed.