Portuguese unions and opposition parties have vowed to fight the government's latest austerity assault on their conditions.

Ministers published their 2014 budget proposals late on Tuesday, proposing a third straight year of cuts to state workers' pay and pensions.

Government employees earning more than €600 (£510) a month will have their pay slashed by up to 12 per cent and pensions above €600 will be cut by around 10 per cent to help save €3.9 billion (£3.3bn).

The government agreed in 2011 to deep cuts in return for a €78bn (£66bn) bailout loan from the troika of the IMF, European Central Bank and European Commission.

But the Common Front trade union umbrella group said it would fight the proposals, announcing a general strike for November 8.

The Portuguese Communist Party has branded the bailout agreement a "pact of agression."

It said the "new package of social terrorism" would worsen the "attack against the state's social functions and public services."

The Communists called for early elections so new government could pull Portugal out of its economic doldrums.

The government claims it has to slash spending to meet a deficit target of 4 per cent of GDP.

But local elections last month saw a massive rejection of right-wing policies.

The CDU - a coalition of the communists and greens - was the only party to increase its share of the vote.