Firefighters doused smouldering buildings and cleanup crews swept rubble from the streets of central Athens on Monday after a night of rioting during which lawmakers approved harsh new austerity measures demanded by bailout creditors to save the nation from bankruptcy.

Police said 48 buildings were burned, including one of the capital's oldest restored cinemas, while dozens of stores and cafes were smashed and looted.

The stench of tear gas still hung in the air on Monday morning, choking passers-by. More than 120 people were hurt in the rioting which also broke out in other Greek cities. Authorities said 68 police needed medical care after being injured by gasoline bombs, rocks and other objects hurled at them, while at least 70 protesters were also hospitalized.

Police arrested at least 67 people, while in several cases they had to escort fire crews to burning buildings after protesters prevented access.

The rioting began Sunday afternoon ahead of a historic vote in Parliament on yet more austerity measures. Lawmakers approved the bill in a 199-74 vote, to the relief of investors who pushed the Athens stock index up five per cent on Monday.

100,000 march on Greek parliament

There was nevertheless strong dissent among the majority Socialists and rival Conservatives, who along with a small right-wing party make up Greece's interim coalition government. The parties disciplined the dissenters in their ranks, with the Socialists and Conservatives expelling 22 and 21 lawmakers respectively, reducing their majority in the 300-member parliament from 236 to 193.

Sunday's clashes erupted after more than 100,000 protesters marched to the parliament to rally against the drastic cuts, which will axe one in five civil service jobs and slash the minimum wage by more than a fifth.

Greece faces further hurdles and delays before it can receive a second, €130 billion ($171 billion) bailout in spite of its lawmakers voting through the austerity measures.

The European Union's economic affairs commissioner, Olli Rehn, called the Greek parliament's approval of a further round of budget cuts a "crucial step forward," but Germany insisted it will still take some time before the second bailout is delivered.

EU ministers to meet

Germany, which as Europe's biggest economy pays the largest part in bailout deals, said it won't give its final approval for the new aid payments until early March — after it is clear how well a debt relief deal with private bond holders would work and its parliament has voted on the new measures.

Pushing the new bailout back for several weeks underlines how much distrust has built up against Greece over the past two years, when many promised cuts and reforms were passed in Parliament but never actually implemented.

But it also means that Greece, its citizens and the rest of the world economy won't know for several weeks whether the country can avoid a potentially disastrous default. A bankruptcy could push Greece out of Europe's euro currency union, drag down other troubled eurozone countries and further roil global markets.

Eurozone finance ministers are to meet on Wednesday to approve the plan, after refusing to do so during a meeting last week, saying Athens had to first approve the new austerity measures.

Commitment in writing demanded

Before signing off on the bailout, the eurozone ministers will still want Greek political leaders to commit in writing to uphold the austerity plan even after the general election in April.

Finance Minister Evangelos Venizelos insisted the country's economic survival hinged on the passage of the new measures.

"The question is not whether some salaries and pensions will be curtailed, but whether we will be able to pay even these reduced wages and pensions," he said in Parliament before the vote. "When you have to choose between bad and worse, you will pick what is bad to avoid what is worse."

The further cuts come after two years of deep spending cuts and repeated tax hikes that have sent unemployment soaring to more than 20 per cent and left the country struggling through a fifth year of recession.

Those measures were taken in return for a first, €110 billion ($145 billion) package of rescue loans from other eurozone countries and the International Monetary Fund, but despite the cutbacks, Greece repeatedly failed to meet its fiscal targets in reducing its debt and deficit and increasing economic competitiveness.