"The country has effectively come to a halt," Efstathios Anestis, a union spokesman, said. "Participation is very high, in many sectors it exceeds 90 per cent of the work force."

'It will never pass'

The protesters, who are also angry at tax collection measures and the privatisation of companies such as Olympic Airlines, brought traffic in Athens to a standstill.

Many of them beat drums and, referring to the budget, chanted: "It will never pass!"

Dimitris Papadogonas, 28, an artist, said: "We are here because we have problems and the government ignores us, but politicians are rich and we are poor."

The action by private sector umbrella union GSEE and its public sector counterpart ADEDY, which represent around half of Greece's workforce, also shut down schools and banks.

Speaking in Athens, Kostas Panantoniou, ADEDY's vice president, said: "This strike is only the beginning. We won't be the victims again. Enough! This policy will be overturned."

Hospitals operated with emergency staff and journalists joined the strike, imposing a 24-hour news blackout.

Air-traffic controllers stopped work from 0900 to 1300 GMT, suspending all but emergency flights.

Olympic Airlines cancelled 152 flights and its smaller rival Aegean Airlines cancelled 46 domestic flights.

Widespread poverty

Greece, which accounts for about 2.5 per cent of the eurozone economy, is starting to feel the pinch of a global financial slowdown.

Costas Karamanlis, the country's prime minister, whose fragile parliamentary four-seat majority has been shaken by scandals, has promised measures to shield consumers from price rises and to compensate workers from privatised companies.

George Alogoskoufis, the country's finance minister, has said that Greece is ready to spend $37bn to protect its banks.

Kyriaki Tassioula, 45, a waitress, said: "We are protesting because they are not listening to us ... The government guarantees the banks but it cut my pension." 

One in five Greeks lives below the poverty line, earning less than 5,000 euros a year, according to government figures.

Unions say the prospect of widespread job losses and government reforms to Greek wage and social security benefits will drag even more of the 11 million population into poverty.