Greece's prime minister has warned that he will not let neo-Nazis terrorise and undermine the country after the stabbing death of a musician blamed on a member of the extreme right-wing Golden Dawn party.

Antonis Samaras addressed the nation on TV as hundreds of mourners threw flowers and chanted anti-fascist slogans during the musician's funeral.

Pavlos Fyssas, a 34-year-old hip-hop and rap singer described by colleagues as an anti-fascist activist, died early on Wednesday from two stab wounds to the chest after leaving a cafe in Keratsini, a suburb of Piraeus.

Authorities saidMr Fyssas identified the man who had stabbed him to police before collapsing. The 45-year-old suspect was arrested, admitted to the killing and identified himself as a Golden Dawn member, police said. He has not been named in accordance with Greek law.

The attack drew wide condemnation from across Greece's political spectrum and increasing calls for a crackdown on the extremist party.

"This government is determined not to allow the heirs of the Nazis to poison our social life, to commit crimes, to terrorise and to undermine the foundations of the country that gave birth to democracy," Mr Samaras said.

"It is the responsibility of us all to raise a barrier to all of those who want to sink into a spiral of tension and violence," government spokesman Simos Kedikoglou said. "And of course, there must be a resolute response to the neo-Nazis. ... We are already moving in this direction to arm the state with legislation so it can deal with this criminal organization."

Golden Dawn leaders insist the party had nothing to do with the killing and have condemned the attack. Greek media and blogs, however, have widely circulated the suspect's name and photos of him at numerous Golden Dawn events.

Golden Dawn supporters are notorious for carrying out violent attacks, mostly against immigrants, often causing severe injuries.

Anti-fascist protests turned violent in several Greek cities on Wednesday night, including the country's second-largest city of Thessaloniki and in Keratsini near the site of the stabbing. Rock-throwing demonstrators clashed with riot police firing tear gas and stun grenades.

In Keratsini, 130 people were detained during the clashes, with 34 of them later arrested. Scuffles broke out in the early hours of Thursday outside Athens police headquarters where they had been taken.

More anti-fascist demonstrations were planned.

The suspect in Mr Fyssas' death appeared before a prosecutor on Wednesday night and was given three days to prepare his defence. He is due back in court on Saturday. His wife and two other people were also arrested on suspicion of attempting to conceal evidence linking him to Golden Dawn.

Golden Dawn, whose senior members have expressed admiration for Adolf Hitler although they deny being neo-Nazi, won nearly 7% of the vote in Greece's 2012 general election, riding on a wave of anger against harsh austerity measures imposed as a result of Greece's deep financial crisis.

Opinion polls show the party's popularity has increased to 12% recently.

Greece's financial crisis has led to deep social unrest and an increasing political polarization, with voters deserting mainstream parties for those on the far left and far right. Strikes and violent demonstrations have been frequent.

"This murder stems from an extremely dangerous development we are seeing in Greece and also other parts of Europe. Sections of society are becoming more radicalised and there is a real risk that hate speech turns into violence and cold-blooded murder," said Council of Europe Secretary General Thorbjoern Jagland.

Greece has been relying on international rescue loans from the International Monetary Fund and other European countries that use the euro since May 2010. In return, it has had to slash salaries and pensions and repeatedly hike taxes.

Greece's economy is mired in a deep recession currently in its sixth year, with unemployment at above 27%, and nearly 60% for those under the age of 25 - the highest levels in the EU.

On Thursday, public sector workers walked off the job for the second day of a 48-hour nationwide civil service strike.