Greek lawmakers on Thursday approved a tough austerity package aimed at averting a default, but the vote was overshadowed by violent street protests in central Athens and dozens of arson attacks against shops and banks.

The legislation passed by 199 votes in favour to 74 against, a convincing majority for Lucas Papademos, the caretaker prime minister who has been given the job of pushing through painful reforms demanded by the European Union and the International Monetary Fund in return for a second €130bn bail-out.

Yet almost 40 legislators from the socialist and conservative parties, the two remaining partners in his national unity government, were absent or voted against the measures, indicating strong opposition to structural reforms and cuts in wages and pensions.