UPDATE 4-Greek lawmakers take bitter medicine, protests flare

* Parliament approves new tax vital to secure aid funds

* Troika expected in Athens by Thursday

* Government says October aid tranche will be released

* Public workers strike, police disperse protesters (Adds approval of tax law, police disperse protesters)

By Harry Papachristou and Michael Winfrey

ATHENS, Sept 27 (Reuters) - Greece's ruling party forced through a deeply unpopular property tax on Tuesday to lure international lending inspectors back to Athens to release vital aid, and riot police fired tear gas to disperse about 1,000 protesters outside parliament.

The vote was an important test of the Socialist government's ability to push through further belt tightening to win an 8-billion-euro ($11 billion) loan from the EU and IMF that it needs to avoid running out of cash next month.

Angry anti-austerity protesters whistled and jeered on the steps of parliament, where all of Prime Minister George Papandreou's 154 Socialist deputies pushed the measure through in the 300-seat assembly.

"The decisions of July 21 are like an institutional Bible to us," Finance Minister Evangelos Venizelos said earlier, vowing to meet the targets of a new bailout deal agreed this summer. "They are the framework within which we move."

The inspectors are expected back in Athens by Thursday and it will be up to them to approve the fresh funds.

The measures have exasperated ordinary Greeks already suffering from several waves of budget cuts and tax rises that have driven unemployment to more than 16 percent and promise to make 2012 the Mediterranean state's fourth year of recession.

"I'm a pensioner, I get 500 euros a month ... This is absurd," said Costas Papaioannou, a 65-year-old retired teacher. "I don't have the money to pay it," he said of the property tax. "Let them come to my house, put me in jail. We have already gone bankrupt anyway."

Bus drivers and metro operators stopped work to protest against austerity measures on Tuesday with tax collectors and some finance ministry officials starting a 48-hour stoppage. More strikes are expected on Wednesday.

Earlier, a column of garbage trucks and city workers on motorcycles drove slowly past the chamber in the ancient capital's Syntagma Square, where about 100 people were hurt in bloody clashes between protesters and police in June.

At the other end of the square, riot police held back hundreds of activists waving banners saying "No New Cuts!" and chanting "Take Your Bailout and Go Away!" who surrounded the Finance Ministry.

PROMISES, ASSURANCES

Inside, Venizelos promised to stick to the deal agreed between Greece, its lenders, and private bondholders in July that will deliver 109 billion euros in funding through 2014 if Greece can cut its bloated public sector, open its economy, and sell off inefficient state firms.

Venizelos had just returned from Washington where he tried to soothe frayed nerves after the "troika" team from the EU and IMF abruptly quit Greece in early September and threatened to cut off funds because of Athens' foot-dragging.

Venizelos said Papandreou would send written assurances demanded by the team to show the government is totally committed to meeting its obligations.

Eurogroup chairman Jean-Claude Juncker said he had been informed the team would return to Athens by Thursday, when sources close to the troika said they would start calculating whether Greece had done enough for the aid.

In the new austerity package to convince the troika, the government said it would cut public salaries and pensions, put 30,000 public contractors on notice and extend the property levy until 2014, two more years than planned.

The troika team has criticised the Athens government for dragging its feet on a promise to cut the 730,000 public workforce by a fifth and sell off loss-making state firms.

The government has also failed to end widespread tax evasion, while a third year of economic contraction has eroded budget revenues and undermined Greece's goal of cutting the budget deficit to 7.6 percent of annual output this year.

Athens' inertia in implementation coupled with European leaders' inability to erect a wider safety net have stoked fears a Greek default could bring down other euro zone states like Italy and Spain and trigger a new global recession.

Responding to media reports that many state run organisations had missed a Sept. 26 deadline to name employees they can lose, Finance Ministry Secretary General Ilias Plaskovitis said there could be outright sackings -- anathema in Greece, where public jobs are protected by the constitution.

Partially drowned out by whistling and shouting activists outside protesting ahead of the vote on the property tax, Venizelos also said Greece would meet its pledges under the bailout deal.

"The disbursement will take place and will take place on time," Venizelos he told a news conference.

PRESSURE BUILDING ABROAD

Papandreou, whose Socialists have suffered a sharp drop in support since June and is well behind the conservative opposition in polls, was in Germany ahead of another key parliamentary vote there on Thursday meant to give more powers to the EU's EFSF bailout fund.

With German voters needing to be convinced about the reasons for the Greek bailout, Papandreou told German industry leaders Greece would "soon fight our way back to growth and prosperity after this period of pain".

European leaders facing rising pressure from their domestic voters about footing a colossal bill for debt-laden states have objected to the idea of keeping Greece afloat if it does not fulfill its part of the bailout.

"If someone asks me -- what if the conditions are not met? I say -- then there cannot be any money," Austrian Chancellor Werner Faymann told a news conference.

Venizelos, a former defence minister known for his oratory and intellect, said signs of participation in a bond swap plan, a crucial part of Greece's efforts to cut costs tied to its 350-billion-euro debt mountain, were encouraging.

Greece hopes 90 percent of creditors holding shorter-dated bonds will switch them with papers of longer maturity and take a "haircut", or loss, of 21 percent on the paper, as outlined in a new bailout scheme agreed among Greece, private bondholders, and the EU and IMF in July.

German and French government advisers recommended Greece be allowed to write off around 50 percent of its debt, but Venizelos rejected the idea. (Additional reporting by Angeliki Koutantou and Renee Maltezou, George Georgiopoulos; Writing by Michael Winfrey; Editing by Peter Millership)