Greece's embattled government on Wednesday survived a confidence vote crucial to avoiding a sovereign default, as thousands of protesters chanted insults outside parliament.

The assembly voted confidence in the government, reshuffled by Prime Minister George Papandreou to stiffen resolve behind a painful new austerity program, by 155 votes to 143 with two abstentions. All Papandreou's Socialist Party deputies voted solidly with the government.

If we are afraid, if we throw away this opportunity, then history will judge us very harshly, Papandreou said in a final appeal for support before the vote.

The closely watched vote had an immediate impact with the euro making gains, although traders said continuing concerns about implementation of the measures contained the currency's advance.

Protesters besieged parliament in Syntagma square, chanting slogans against the politicians, shining hundreds of green laser lights at the building and into the eyes of riot police outside and pushing their hands forward in a traditional insult.

Papandreou's government must rapidly pass two more tests -- enacting the austerity plan and the laws needed to implement it -- to win a new bailout to avert the euro zone's first sovereign default and possible global economic disaster.

The vote follows a European ultimatum requiring the debt-choked Mediterranean state to implement a new five-year package of deeply unpopular reforms in two weeks or miss out on a 12-billion euro aid tranche and plunge into bankruptcy.

European Commission President Manuel Barroso piled on the pressure before the vote, saying that Greece faced a moment of truth and needed to show it was genuinely committed to the reforms.

No-one can be helped against their will, 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.

Acting IMF chief John Lipsky sent a similar message, saying international lenders were willing to help peripheral euro zone economies as long as they tried to carry out reforms.

He said the Greek fiscal system was broken but could be fixed with the right political will.

PROTESTS INCREASE

As parliament debated the confidence motion, demonstrators stepped up their protests in the square, where hundreds have camped for weeks to show their opposition to more austerity, which has deepened the worst recession for 37 years.

I believe we should go bankrupt and get it over with. These measures are slowly killing us, said 22-year-old student Efi Koloverou. We want competent people to take over.

Glykeria Madaraki, a 39-year-old unemployed woman, said: God help us. There is no way these people are getting us out of the crisis. I feel insecure and I see my country being sold off. They didn't ask what we think about all this. I want elections.

Inside parliament the opposition poured similar disdain on the government. This is not a program to salvage the economy, it's a program for pillage before bankruptcy, said Alexis Tsipras, head of the small opposition Left Coalition.

(Additional reporting by Renee Maltezou, Lefteris Papadimas and Dina Kyriakidou; Editing by Alistair Lyon)