UPDATE 1-Thousands in Lisbon protest against austerity cuts

Sat May 29, 2010 3:23pm EDT

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* Tens of thousands in peaceful march in central Lisbon

* Top union leader vows to intensify social resistance

* Will use all forms of struggle, leaves strikes as option

(adds estimated turnout, union leader quotes)

By Shrikesh Laxmidas

LISBON, May 29 (Reuters) - Tens of thousands marched in Lisbon on Saturday against the government's austerity measures, with the leader of Portugal's top union vowing to intensify resistance but stopping short of calling a strike.

The rally was the first outpouring of popular discontent after the government announced additional austerity measures such as tax hikes, pay and spending cuts on May 13.

But the peaceful rally was a far cry from the tense, at times violent, atmosphere at protests in other austerity-afflicted European Union states, especially Greece.

The 725,000-strong Confederation of Portuguese Workers (CGTP) had said it expected as many as 200,000 to march. A CGTP national committee official said tens of thousands of people joined the march. Police declined to estimate the turnout.

The rally did not appear as big as other demonstrations held in the same central Lisbon location, the largest of which was one by 140,000 teachers in 2008.

CGTP leader Manuel Carvalho da Silva said, however, that the union plans to escalate protests against the financial cutbacks. His union has left open the option of calling a general strike.

"We are going to intensify, diversify the labour and social struggle," he told the protesters after they had marched down Liberdade avenue -- Lisbon's main thoroughfare.

"We are committed to all the forms of resistance the constitution allows, and will decide on their timing and form depending on the government's actions," Carvalho da Silva said.

He called the government's measures "false solutions, not inevitable and profoundly wrong political options".

The government's plan aims to soothe investor concerns over Portugal's creditworthiness and fight debt contagion from Greece. Portugal seeks to cut its budget deficit to 7.3 percent of gross domestic product this year from 2009's high of 9.4 percent, and then gradually to 2.8 percent by 2013.

"It is with great disappointment that I see these additional measures, as they attack the economic rights of those who have so little already," said school teacher Joel Canuto from Sintra.

Some banners displayed at the rally urged further action.

"Let's follow Greece: General Strike!" one read.

Several others said, "The austerity plan stinks!"

Analysts say the relatively low level of public protest in Portugal and the strategy of backing the austerity plan by the main opposition party, the centre-right PSD, for now means there is little chance of a government collapse before the next presidential mandate starts in March 2011.

"The Portuguese are a peaceful people, but there is a limit to how much they can take. Right now we are at that limit. People are struggling to pay rents, to survive," said Antonio Mendes, local government councillor from Vendas Novas. (Editing by Louise Ireland and Mark Heinrich)

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