Tensions were high outside the Greek parliament late on Wednesday when riot police encircled the area after protesters tore down metal barriers near the building.
Thousands of Greek workers chanting anti-austerity slogans flocked outside parliament, as lawmakers inside voted on a divisive reform bill that would cut thousands of public sector jobs.
School guards that are to be placed in labour reserve in August placed their uniforms on top of Greek flags lying on the ground in front of riot police in a symbolic gesture.
The bill - whose passage is a condition for Greece to unlock further aid from the EU and the IMF - includes plans for a public sector transfer and layoff scheme mainly affecting teachers and municipal police.
More top news
The threat level has been raised to critical by MI5's Counter-Terrorism Analysis Centre.
Prime Minister Theresa May announced the decision from Downing Street.
A man, apparently armed with a small axe and a large stick, was detained close to the event and police cleared the area as a precaution.