The Greek government has tonight survived a parliamentary confidence vote tonight, the first of three tests it must survive to avert the euro zone's first sovereign default.

More than half of the deputies in the 300-strong parliament backed the socialist government of Prime Minister George Papandreou, who last week shuffled his cabinet last week to stiffen resolve ahead of a painful new austerity programme.

The vote followed a euro zone ultimatum stating that Athens must approve a new five-year package of painful economic reforms in two weeks or miss out on a €12 billion aid tranche that it needs to avoid bankruptcy.

The government must now hammer through the five-year package of €28 billion in tax hikes and spending cuts by June 28th.

It must then push through laws implementing the package - potentially more difficult as it will tackle individual privatisations, tax measures and spending cuts - in time for an extraordinary meeting of euro zone finance ministers on July 3rd.

Ahead of the vote more than 20,000 protesters gathered outside the Greek parliament - shining hundreds of green laser lights at the building and into the eyes of riot police and pushing their hands forward in a traditional insult.

Television pictures showed the protestors reacting angrily to news that Mr Papandreou's government had survived the vote.

European Commission president Manuel Barroso piled on the pressure earlier today, saying Greece faced a "moment of truth" and needed to show it was genuinely committed to the package.

"No-one can be helped against their will," Mr Barroso said in Brussels, adding that backing from the political opposition - which has so far rejected the package and called for elections - was important for success.

In a speech ahead of the vote, Mr Papandreou said Greece faced tough talks with its European partners to emerge from its financial crisis, and that saving the country was the priority.

"If we give up in the middle of the road, history will judge us harshly," Mr Papandreou said as a debate on a motion of confidence drew to a close tonight.

"The impression the political class in this country gives is that it hasn't understood the seriousness of the crisis."

Finance minister Evangelos Venizelos said there was agreement among political parties on fundamental issues related to saving the country from default.

Mr Venizelos said the Greek parliament needed to give a clear signal to the world. As he spoke, deputies of the opposition New Democracy party walked out of the chamber.

While parliament debated the midnight confidence vote against a backdrop of deep public anger over the pain of the austerity measures, IMF and European inspectors arrived in Athens to discuss changes requested by Greece to the reform package.

Having already missed targets agreed in its first, year-old bailout, the package is required if Athens wants to both receive the next tranche of those funds and secure a second bailout worth an estimated €120 billion.

The new mid-term plan envisions raising €50 billion by selling off state firms and includes €6.5 billion in 2011 fiscal consolidation, almost doubling existing measures that have helped extend a deep recession into its third year.

Most analysts remain sceptical that Greece will be able to reduce its vast sovereign debt pile of €340 billion, or more than €30,000 per head of its 11.3 million population even if it passes the reforms.

The visit of the IMF and EU inspectors follows a request by newly-appointed finance minister Evangelos Venizelos for changes to the mid-term plan. Greece's government has said the lenders' inspectors would discuss changes "at a technical level."

The government has not given any details, although Mr Venizelos's predecessor had proposed dropping a tax hike on heating oil and raising the tax-free threshold on property.

Agencies