Around 10,000 strikers and unemployed workers marched in the capital, Seoul.

South Korea received the largest ever bail-out package

The organisers of the strike, the Korean Confederation of Trade Unions (KCTU), blame economic reforms imposed by last year's record $57 billion IMF rescue package for the lay-offs. The unions want the government to renegotiate the terms and conditions of the deal.

The strike action has been declared illegal by the government.

Riot police were on standby, as they had been on Wednesday when organisers said more than 100,000 workers came out on strike. However, the protests reportedly continued peacefully.

'Dissolve conglomerates'

South Korea football fans hold a banner saying 'Solution of IMF sanction'.

The striking workers wore red headbands, carried banners, and chanted: "Dissolve chaebols [conglomerates], renegotiate with the IMF, stop lay-offs."

The KCTU said thousands of striking workers rallied in Seoul and 11 other cities across the country and that 150,000 workers at 130 workplaces took part in the two-day strike.

The government said that only 42,800 workers at 43 firms took part.

The KCTU President Lee Kap-Yong said: "The door for dialogue remains open. We are not insisting on all of our demands and we are willing to compromise."

Labour Minister Lee Ki-Ho said the government would not resume talks with the KCTU unless it called off a second general strike.

The strike is set for June 10 if the government fails to meet the organisation's demands for a halt to industrial lay-offs. The KCTU has also called a similar rally for Saturday.

The reforms set out in the IMF deal include allowing companies to sack workers for the first time. As a result, tens of thousands of workers have lost their jobs.