Thousands of protesters were demonstrating in Athens on Thursday against austerity measures demanded by the new unity government to persuade its creditors to release bankruptcy-saving loans.

"We will throw all of them out," promised a banner held aloft by students while another carried by anarchists read: "In the face of tyranny, one must choose between chains and arms."

Greece is slogging through a third year of recession exacerbated by wage cuts and tax hikes imposed by the previous socialist government of George Papandreou, and set to continue under the new coalition administration set up last week under former European Central Bank deputy chief Lucas Papademos.

Thousands of police were deployed across Athens for the demonstrations which will test the scale of public defiance against the new government.

The participation of far-right politicians in the cabinet for the first time since democracy was restored in 1974 also added to the outrage of the protesters.

"Down with the government of socialists, conservatives and fascists," a protester banner said.

The march on November 17 each year commemorates a student uprising in 1973 that helped topple a US-backed army dictatorship and brought back the republic.

About 7,000 police -- including 700 riot officers equipped with tear gas, batons and shields -- mobilised in the capital focusing on state buildings and embassies that are regularly targeted during protests.

The march, culminating at the US embassy, was to pass in front of parliament, the European Union offices in Athens, the French and Italian embassies and several ministries.

Tempers flared on Wednesday after leftist students prevented youth members of the socialist party -- which also shares power in the government -- from laying a wreath at the Athens Polytechnic, the heart of the 1973 uprising.

Last year, police fired tear gas and arrested more than 20 people after clashes broke out on the sidelines of the demonstration attended by about 20,000 people, according to the authorities.

The socialist, conservative and far-right nationalist parties formed a coalition last week to save Greece from looming bankruptcy, and they must now approve a crucial eurozone debt bailout before holding early elections.

The new government was officially confirmed in parliament late on Wednesday, with 255 out of 300 lawmakers showing their support in a vote of confidence.

But Greece's third largest party, the Communists, and the smaller leftist Syriza party have pledged to fight to bring down the government to prevent further belt-tightening in a country mired in a deep recession since 2008.

"The Greek people won their independence through struggle. Anybody who tries to deprive them of it will pay dearly," said Syriza leader Alexis Tsipras.

Papademos must secure the latest installment of a 2010 bailout to avert bankruptcy by mid-December, when the state coffers run dry, and enforce reforms agreed as part of a second rescue deal agreed last month.

He took the first steps towards writing off a large chunk of Greece's 350-billion-euro debt on Wednesday night when he held talks with Charles Dallara, the managing director of the Institute of International Finance who is leading negotiations on behalf of the banks.

Brussels has maintained pressure on Athens to commit itself in writing to the measures required by its foreign creditors, a pledge which two parties within the governing coalition have so far resisted.

The November 17 demonstration is a treasured anniversary to many Greeks.

At least 44 people were killed in the 1973 military crackdown on the student uprising at the Athens Polytechnic university, an event generally considered to have broken the junta's grip on power.

The bloodstained Greek flag that flew over the Polytechnic that night is traditionally carried at the head of the demonstration in the capital.