Hungarian PM Ferenc Gyurcsany remains defiant after a second night of riots in the capital, Budapest, and has said he will not tolerate violence.
The clashes were triggered by his admission that he lied about the state of public finances to win re-election.
Police and demonstrators clashed again on Tuesday, leaving more than 50 people hurt, after 10,000 people protested peacefully outside parliament.
Calm is now said to have returned to the streets of Budapest.
Mr Gyurcsany has resisted opposition calls to resign, and says he remains committed to a programme of tough economic reforms.
These, he says, are essential if Hungary is to cut its budget deficit enough to adopt the single European currency, as planned, in 2010.
"We will have no patience with them [the rioters]," he told a cabinet meeting on Wednesday.
"The government will hold firm on the only track possible: the policies of reform to ensure development and economic stability," the socialist leader told the meeting, which was open to the press.
"We lied morning, noon and night"
Feelings are running high because Mr Gyurcsany's acknowledgement that he earlier lied to cover up the truth about the scale of the budget deficit came on top of a string of tax hikes and spending cuts, says the BBC's Central Europe analyst, Gabriel Partos.
At over 10% of GDP this year, the deficit is the highest in the European Union.
Most Hungarians are affected by the cuts in health care and education, and many do not understand the need for these measures when the Hungarian economy has grown by around 50% in the last decade, our correspondent adds.
Future challenges
On Tuesday, small splinter groups of demonstrators in Budapest city centre put up barricades, set fire to cars and threw missiles at police, who responded with water cannon and tear gas.
Parliament had approved a declaration condemning similar violence which occurred in the capital the night before.
Mr Gyurcsany said Monday's protests, in which dozens of people were hurt, were Hungary's "longest and darkest night" since the end of communism in 1989.
He appears to be enjoying the continued support of his Socialist Party and their Liberal coalition partners.
But he faces a number of forthcoming challenges: on Thursday students are set to demonstrate against the reintroduction of university fees, and on 1 October, municipal elections will be held throughout Hungary.
The Socialist-Liberal coalition has been trailing the conservative opposition party Fidesz in the polls.
"The prime minister and his government must go regardless of the outcome of local elections," Janos Ader, a top Fidesz party official, told public television on Wednesday.
Fiscal hole
Mr Gyurcsany's comments which sparked the protests were made at a taped meeting he held with his MPs a few weeks after April's election, and leaked to media on Sunday.
"Mr Gyurcsany should resign... He and his friends should leave this country for good"
In excerpts broadcast on state radio, Mr Gyurcsany candidly admitted his government had accomplished "nothing" and had been lying for "the last year-and-a-half to two years".
"We lied morning, noon and night," he said in a speech punctuated by obscenities.
Mr Gyurcsany won the elections on a platform of tax cuts, but has since proposed tax increases to deal with a huge budget deficit.
Protests had already been planned this week over the austerity measures.
The European Union has urged the government to press on with its efforts to mend public finances.
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