Police clashed with protesters outside parliament on Wednesday, firing tear gas as they came under attack with firebombs during a massive demonstration against austerity.

An AFP reporter saw some 200 youths attacking a steel barricade erected outside the parliament building as the street protest of some 70,000 people converged on central Syntagma Square in Athens.

A record turnout of more than 125,000 people according to police rallied around the country against a new austerity bill heading for a parliament vote on Thursday.

The attackers also pelted police with refuse littering the city's streets from a two-week strike by municipal garbage collectors.

The demonstrations in Athens, Thessaloniki, Patras, Heraklion and other cities were mainly peaceful despite boiling anger against the new wave of cuts imposed on a country already slogging through nearly two years of belt-tightening.

"Today and tomorrow is the greatest general strike, the greatest mobilisation by the Greek people against the unfair, anti-social and ineffective measures brought by the government and its creditors," said Yiannis Panagopoulos, head of the main union GSEE that represents private sector staff.

Police in some areas added that participation was the highest in a decade.

Authorities in Athens threw a cordon of riot police buses and a steel fence in front of parliament and shut down two metro train stations in the area.

Four youths were arrested at the start of the demo, police said, with reports saying firebombs were found in their possession.

The government has repeatedly warned that failure to pass the legislation on Thursday ahead of an EU crisis summit on Sunday would prompt Greece's peers to block the release of loans and cause a payments freeze.

It is expected to weather the vote, but a number of ruling party deputies have threatened to oppose an amendment to collective wage agreements.