The Greek parliament has passed a second austerity bill, opening the way for the EU and IMF to release a €12bn loan instalment which Athens urgently needs to stave off bankruptcy.

The vote passed without any of the wild street battles that marred yesterday's vote on an initial austerity bill.

The programme of cutbacks agreed with the European Union and International Monetary Fund includes tax rises, pay cuts, privatisation and some 150,000 public sector redundancies.

The parliament passed the law today by 155 to 136 votes. The first motion was passed yesterday afternoon by 155 votes to 138.

A 48-hour general strike and the violence of yesterday's street protests in the capital had raised fears of widespread public defiance.

There were fresh clashes early this morning in the square around the parliament building, but the area is now calm.

The austerity deal is a condition for receiving the next €12bn instalment of the original €110bn bailout programme.

Eurozone finance ministers are likely to approve the payment at a meeting in Brussels on Sunday.

Another meeting takes place on 11 July at which ministers will consider a second €100bn-plus bailout for Greece.

Elsewhere, strong disagreement has emerged among EU member states against a new seven-year budget proposed by the European Commission.

Britain has described proposals for a 5% increase in the budget as 'unrealistic'.

The European Commission has proposed introducing a 1% sales tax and a levy on financial transactions as part of plans to boost its seven-year budget to over €970bn.

The Irish Government has given a cautious response to the proposed reduced allocation for agriculture in the budget.