More than 100,000 people have taken to the streets in the Romanian capital to protest against an emergency government decree decriminalising a string of corruption offences.

Protesters on Wednesday evening in Bucharest shouted "Rats" and carried banners that read "The morning shift", sending a message that the protests will continue until the government resigns.

The marches against the government's move followed similar protests a day earlier.

Some 130,000 people marched in Bucharest, while another 100,000-150,000 were estimated by riot police to have joined similar rallies in 55 other towns and cities, including Timisoara, Cluj, Iasi and Sibiu.

OPINION: Keep the corrupt in jail, where they belong

Romania's top judicial watchdog announced a court challenge on Wednesday against the government decree decriminalising a number of corruption offences in what critics say is the biggest retreat on reforms since the country joined the European Union a decade ago.

The decree, unveiled by the Social Democrat-led government of Prime Minister Sorin Grindeanu after it took power earlier this month, has drawn sharp criticism and triggered the biggest street protests since the fall of communism in Romania in 1989.

If enforced, the decree would, among other things, decriminalise abuse-of-power offences in which the sums involved were less than 200,000 lei ($48,000).

That would put an end to an ongoing trial of Social Democrat party leader Liviu Dragnea, who is accused of using his political influence to secure state salaries for two people working at his party headquarters between 2006 and 2013. Dozens of MPs and mayors across all parties stand to benefit from the decree.

"I don't understand what protesters are upset about," Dragnea told reporters on Tuesday.

Two opposition parties, the opposition Liberals and the Save Romania Union (USR), announced they would file a no-confidence motion on Wednesday against the government, which enjoys a comfortable majority in parliament.

As parliament opened for its first regular session of the year, USR politicians paraded banners that read "Shame" while other opposition deputies shouted "Resignation" and "Thieves".

Entrenched corruption

President Klaus Iohannis took part in an emergency meeting of Romania's top magistrates' body, the Superior Magistrates' Council (CSM), telling reporters afterwards: "The problem is that one cannot act the way the government did in a country with the rule of law, which Romania is and wants to remain."

CSM president Mariana Ghena said she would file a challenge with the constitutional court by the end of the day.

The European Commission, which has Romania's justice system under special monitoring, warned against backtracking.

"The fight against corruption needs to be advanced, not undone," Commission head Jean-Claude Juncker, and his deputy, Frans Timmermans, said in a joint statement. "We are following the latest developments in Romania with great concern."

The embassies of Belgium, Canada, France, Germany, the Netherlands and the United States expressed deep concerns in a joint statement "over the government's actions ... which have undermined Romania's progress over the last ten years with the rule of law and the fight against corruption.

"This decree ... can only undermine Romania's reputation in the international community and risks affecting partnerships based on common values, inherent to the guiding principles of the EU and NATO," the statement said.

Romania's Social Democrats won back power in a December 2016 election a year after protesters drove them from office in an outpouring of anger over a deadly fire at a nightclub that lacked emergency exits and safety permits.

Many saw the fire as emblematic of widespread corruption and impunity, but after 12 months of technocrat government, the Social Democrats returned on a promise to hike wages and pensions and cut taxes.

Anti-corruption prosecutors are currently investigating more than 2,000 abuse-of-power cases. They indicted more than 1,000 over the past three years with damages worth up to 1bn euros.

The decree would apply to ongoing investigations and trials as well as new cases and it specifies it will come into effect within ten days. Criminal negligence is also no longer an offence and the definition of conflict of interest has narrowed.

The government on Tuesday also approved a draft bill granting prison pardons that requires parliamentary approval.

"These provisions aim to exonerate all top and medium-ranking officials - parliament clerks, government members, all those able to approve laws, decrees, local decisions," chief anti-corruption prosecutor Laura Codruta Kovesi told television station DIGI24.

"Since last night, every day has become a major risk for the judicial system."