Greek Prime Minister George Papandreou starts a campaign on Monday to secure a new international bailout by imposing years of austerity on a nation already seething over corruption and economic mismanagement.

Unease is growing within Papandreou's ranks about the consequences of waves of budget cuts demanded under successive deals with the European Union and IMF -- and this could turn into alarm after at least 80,000 Greeks crammed a central Athens square to vent their anger over the nation's dire state.

As the government struggles to prevent Greece from defaulting on its debt, the Socialist cabinet starts discussing at 2 pm (6 a.m. ET) the medium-term economic plan which will impose 6.4 billion euros of extra austerity this year alone.

This is the first stage of a drive to turn the plan, agreed on Friday with the EU and IMF as the price of a new financial rescue, into law despite signs of dissent in the ruling party.

Papandreou will present the plan to the political council of his PASOK party on Tuesday, before the cabinet clears it the following day and sends it to parliament.

Greece's international lenders say the new bailout package, which would replace a 110 billion euro deal agreed only a year ago, depends on Athens keeping to its promises for further austerity and accelerated privatizations.

But Papandreou is under huge pressure from voters who are suffering under pay and pension cuts and soaring unemployment.

On Sunday night people crammed into the capital's Syntagma Square to show they are close to the limit of their endurance.

Thieves - hustlers - bankers, read one banner raised above a sea of splayed hands waved at the parliament building which overlooks the square, an offensive gesture in Greek culture.

Turnout was the biggest so far in a series of 12 nightly rallies inspired originally by Spain's protest movement.


Greek employees on modest salaries are furious that they have to pay ever higher taxes in the drive to reduce a towering budget deficit, while they believe the self-employed such as doctors and lawyers are getting way with flagrant tax evasion.

Instead of going after tax cheats, they are raising taxes and cutting working people's pay, said Yannis Mylonakos, 34, who lost his job at an advertising agency and joined Greece's army of unemployed, which has hit 15.9 percent of the workforce.

Labour Minister Louka Katseli promised a crack down on fraud to achieve spending cuts without hurting honest citizens.

Greek record keeping is poor and people often fail to declare the death of relatives to continue getting their benefits. Fiscal consolidation without social cost is feasible, provided there is will, persistence and efficiency, she said.

Data crosschecks had revealed about 4,500 dead civil servants were still getting their pensions, burdening taxpayers with more than 16 million euros ($23 million) each year.

The government was also investigating a suspiciously high number of pensioners over the age of 100, she told daily Ta Nea in an interview.

Such savings are a drop in the ocean. The medium-term plan aims for a further 22 billion euros in austerity steps in 2012-15.

Papandreou has used his parliamentary majority to ram through successive rounds of austerity. But faced with the popular anger, some PASOK lawmakers are becoming uneasy.

A group of 16 wrote to the prime minister on Thursday demanding a full party debate on the medium-term plan as a matter of patriotism and democracy.

Interior minister Yannis Ragousis warned that rocking the boat could lead to early elections. Opinion polls suggest this would produce a political stalemate, raising the risk that the new bailout deal with the EU and IMF might unravel.

Anyone who drives the nation toward elections now will be effectively giving it the last push over the cliff, Ragousis told Sunday's edition of the Realnews newspaper.

Greece's first, 110 billion-euro, bailout assumed that it could resume borrowing commercially early next year. This now appears inconceivable, meaning a new package is vital.

(Writing by David Stamp, editing by Mike Peacock)