Costas Karamanlis, Greek prime minister, on Wednesday announced measures to compensate more than 500 businesses damaged in five days of rioting in the country after the killing of a 15-year-old student by a police officer.

Mr Karamanlis, who is struggling to regain control of a volatile political situation, said small businesses would receive immediate cash payments to cover repairs and Christmas bonuses for staff, as well as several months of debt relief.

“We are committed not only to maintaining the safety of our citizens but also to reviving businesses that have suffered damage,” he said. The announcement came after public sector workers went ahead with a 24-hour strike and a rally outside parliament, after rejecting the prime minister’s appeal to avoid action that could provoke further violence.

Highlighting a rebellious popular mood, the rally turned into a protest against the police rather than the government’s plans for tighter fiscal measures in next year’s budget.

Several thousand public sector workers, many in their 40s and 50s, shouted “No to police violence” and “Out with the MAT” – the initials of the riot police.

“We’re not afraid of threats and youths in hoods. You cannot deny the right to protest peacefully,” said Ilias Iliopoulos, the union federation’s secretary-general.

As the rally ended, groups of young protesters threw rocks at riot police who used teargas to disperse them.

Sporadic disturbances continued around Athens Polytechnic, which police are banned from entering, but there appeared to be fewer protesters on the streets than on previous days.

Amid tight security, the police officer facing charges of premeditated manslaughter in relation to the boy’s death appeared before an Athens prosecutor on Wednesday.

Alexis Kouyias, his lawyer, told Reuters that a ballistics report, which has not been made public, showed the teenager was killed by a ricocheting bullet. Witnesses had said the officer aimed directly at him.

More than 2m public sector workers took part in the strike, which closed state banks, government offices, public transport and state-controlled media, according to unions.

George Alogoskoufis, the finance minister, is expected to cut the size of planned increases in social spending to help to fund a sharp increase in the cost of servicing debt caused by widening spreads on Greek government bonds. Workers are also concerned about the implementation of plans to rescue the state pension system by reducing the number of pension funds and raising contributions.

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