Thousands of people gathered in the central Neptune plaza to form a human chain around parliament, with more than 1,500 riot police blocking access to the building.
At least 22 people were arrested and more than 32 injured in skirmishes between protesters and Madrid police, in displays more violent than previous protests.
Spain is under pressure from his European partners to cut its deficit in order to secure loans of up to €100bn (£79.7bn) to bail out the country’s banks. It has been forced to deepen spending cuts as income tax receipts have dwindled due to the country’s economy contracting.
The government said yesterday that Spain’s budget deficit at the end of August had hit 4.77 per cent of GDP, up from 4.3 per cent at the end of June and above the government’s year-end 4.5 per cent target. Rajoy has said that tomorrow’s 2013 budget will see spending cut in most departments.