Hundreds of protesters clashed with riot police in Athens today smashing cars and hurling petrol bombs during a massive demonstration against the government's austerity measures.

Police fired tear gas and stun grenades as the violence escalated outside parliament.

The clashes broke out as 20,000 protesters marched to parliament during a general strike against new employment reforms in crisis-hit Greece.

The strike grounded flights, closed factories, and disrupted hospital and transport services.

Youths wearing black masks and ski goggles used sledgehammers to smash paving stones and hurled the rubble at police. A central post office near parliament briefly caught fire as employees and bystanders ran for safety.

The chaotic clashes were among the worst since the start of Greece's financial crisis, which ignited the European debt crisis and has resulted in wage cuts and a spike in unemployment. In May, three people died in a bank torched by rioters.

Crippled by high budget deficits and a mountain of debt, Greece was saved from bankruptcy in May by an international rescue loan package. In return, the government slashed pensions and salaries, raised taxes and retirement ages and eased restrictions on private sector sackings.

Last night the government won a key vote in parliament on new employment reforms that include deeper pay cuts, salary caps and involuntary staff transfers at state companies. The new law also reduces unions' collective bargaining power in the private sector, allowing employers to substantially cut salaries.

Unions said today's strike aimed to pressure the government into slowing down the spending cuts that it said are hurting average Greeks.

"There is huge participation in this strike ... I believe it will put pressure on the government," Stathis Anestis, deputy leader of Greece's largest union, the GSEE, said. "We want the government to take back the latest labour law that will hurt workers' rights."