Greek taxi drivers today extended indefinitely a two-day strike against government plans to open up their sector to competition and vowed to step up protests.

Hundreds of taxi drivers rallied outside the transport ministry, jeering and holding banners reading "Hands off our taxis". Police fired teargas at a group of drivers who hurled plastic bottles and stones at officers.

After meeting the transport minister, taxi union officials said talks on the terms of a key reform had reached a deadlock and the walkout, which has already disrupted traffic and blocked thousands of tourists at ports, would continue.

"The minister rejected our proposal," said the head of main taxi union SATA, Efthimis Lyberopoulos. "But we won't back down."

The EU and the IMF have asked Greece to liberalise about 135 protected professions to improve lagging competitiveness and boost the economy, as part of a €110 billion bailout deal to save the country from bankruptcy.

Unions have opposed plans to start issuing taxi licences for a small fee, ending the practice of drivers selling on the permits for tens of thousands of euros.

Hundreds of drivers lined up at toll stations on a highway near the city of Patras lifting the bars and letting drivers through for free. Others blocked the main highway connecting central and northern Greece.

Taxi drivers on the southern island of Crete blocked roads to airports, causing traffic jams.

"We are here to fight for what is left in our lives," said Elias Karapatakis, head of the taxi union in Chania, Crete.

The government has accused the taxi drivers of hurting the country's vital tourism industry by blocking roads at airports and ports.

"The country is fighting for its survival ... and you have made a decision to hurt Greek society," Transport Minister Yannis Ragoussis told taxi drivers, according to a statement released by the ministry

Agencies