Riot police, some on horseback, are on standby outside the Dáil where a small splinter group has broken away from the mass trade union-led rally in Dublin city centre.
Masked protesters are firing bangers into the crowd and at Gardaí, and burning Fianna Fáil posters.
Earlier, more than 50,000 people gathered outside the GPO to demonstrate against the Government's austerity measures.
Public service workers, students and left-wing political groups marched through Dublin under the banner of the Irish Congress of Trade Unions (ICTU) to demand a better and fairer way.
Thousands then filled the capital’s main thoroughfare, O’Connell Street, for a mass rally outside the historic GPO – where the 1916 Proclamation of Independence was read.
Jack O’Connor, president of the SIPTU trade union, said the Government’s recovery plan and bailout was about rescuing the people – “But it’s about rescuing the people at the top of the banks in France and Germany,” he told the cheering crowds.
Gardaí said the protest passed peacefully, with no arrests made during the day.
After the protest hundreds of activists broke away and marched to the Dáil, where masked men set fire to an election poster of Taoiseach Brian Cowen.
Dozens of gardaí are at the scene.
The Dublin march followed news of an €80bn rescue package to bail out the Irish economy and details of the Government’s four-year national recovery plan.
Drastic measures include slashing the minimum wage, €3bn in social welfare cuts, a rise in tax and the axing of 25,000 public sector jobs.
An austerity budget is planned for December 7 – when €6bn of cuts will be made.
Single parent and student Vicky Langan, 24, travelled from Cork with her three-year-old daughter Sionnach to demonstrate.
“I’m worried about my child’s future as an Irish citizen and I’m seriously considering upping the two and leaving the country if things take a turn for the worse,” she said.
One steward told protesters he feared some Government ministers might be among the crowd.
“We have been warned to ask you about pickpockets,” he said.
But one enterprising Dubliner was attempting make some money at the protest, selling gloves to demonstrators out in the winter chill.
Hospital porter Brian Condra said he fears he will struggle to feed and clothe his three young children after the budget.
“Brian Cowen said three days ago people should pull together, I think he has a neck because he is ripping this society apart,” said Mr Condra, 39, from Drogheda.
“He’s destroying this country to protect the banks. I’m already struggling.
“I’m mad because I work for a health service and I’ve seen a health service being dismantled.”
As the large crowds dispersed, activists and left-wing political parties, led by Independent Socialist MEP Joe Higgins, held a second smaller rally under the statue of patriot Daniel O’Connell.
He said it was time the trade union movement was reclaimed.
“The leadership is not leading a serious fightback in opposition to this disaster,” said Mr Higgins.
“The union leaders are simply saying bring down the debt over a longer period of time. That’s disastrous.
“Our plan is the working class people of Ireland not pay for a single cent of the tens of billion of euros that was strangled in bad debt.”
The protest came just 24 hours after the government suffered a blow with a by-election defeat to Sinn Féin, leaving the coalition government with a majority of just two.