Thousands gather in protest as parliament votes to pass new austerity measures in 2013 budget

Greek MPs passed a budget for 2013 on Sunday night that paves the way for the country to receive further financial aid. It was passed with a comfortable majority, unlike the narrow margin secured on last week's vote on an austerity package and labour reforms.

The legislation imposes deep spending cuts on the country's battered economy, as international lenders demand further austerity in return for assistance. Antonis Samaras's ruling coalition won the vote just four days after the multi-year, €13.5bn (£10.8bn) austerity package.

Thousands of people had gathered outside the Greek parliament in Syntagma Square, Athens, to urge MPs to vote down the budget. Leading the protest march were flag-waving trade unionists with the communist-aligned Pame party followed by private and public sector workers.

The protesters' chants included "Out, out, out with the IMF" and "Hands off workers' rights".

There was drama inside the chamber where opposition MP Stathis Panagoulis, of the leftwing Syriza party, warned that Greece faced "civil war", and that politicians risked being "lynched" and "murdered" as a result of the austerity measures.

The budget includes hefty cuts in pensions and public sector wages, agreed through torturous negotiation with Greece's "Troika" of lenders, the IMF, European commission and European Central Bank.

It also contains dire economic forecasts. Greece's national debt is predicted to hit nearly 190% of GDP next year – much higher than when its second bailout was agreed in March. It also warns that Greece's long recession will continue, with GDP shrinking by another 4.5% in 2013.

Economists say the projections show that Greece cannot meet its targets without the two-year extension that Samaras has been quietly urging fellow European leaders to support.

Last week's austerity package was eventually approved by 153 of the 300 MPs in the chamber. Democratic Left, the junior partner, abstained in protest at labour market reforms. Greece faces a nervous wait for its next tranche of bailout cash even if the budget is approved, with eurozone leaders unlikely to agree on a payment date when they meet on Monday.