Hungarian riot police fired tear gas, rubber bullets and water cannon at stone-throwing anti-government protesters as the country marked the 50th anniversary of the 1956 uprising against Soviet rule.

About 70 people were injured in the clashes with the mostly far-right protesters on Monday, officials said, while the main opposition staged a 100,000-strong peaceful rally to demand the resignation of Socialist Prime Minister Ferenc Gyurcsany.

Demonstrators started up a Soviet-era T-34 tank and drove it at police lines until it ran out of fuel, but with the protests fading to about 1,000 people early on Tuesday Gyurcsany looked to have survived another challenge to his authority.

Protesters took to the streets more than a month ago to demand Gyurcsany quit after he admitted lying about the economy to win national elections in April. It resulted in the worst street violence in Budapest since the end of communism in 1989.

Viktor Orban, leader of the main right of centre Fidesz opposition party, again branded Gyurcsany and his Socialists as an "illegitimate" government on Monday and called for a referendum on tax rises and welfare cuts.

But foreign investors, who hold billions of dollars of Hungarian bonds, see Gyurcsany as the only person capable of reducing a budget deficit to help end economic instability and put the country on a path to the euro.

In a leaked tape on September 17, Gyurcsany told a party meeting "we lied in the morning, we lied in the evening" about the economy to win the April elections.

He campaigned on a program of tax cuts and reversed those when he became the first prime minister in five elections since communist rule to hold on to power.

"Four-and-a-half weeks ago I thought Gyurcsany cannot survive this, but there has been no sign he has any internal moral constraint to quit," said Andras Giro-Szasz, political analyst at the right of centre Szazadveg Political Institute.

"Now I am sceptical that this (resignation) will happen any time in the future," said Giro-Szasz.

Gyurcsany, despite criticism from the opposition and the country's president, won a parliamentary vote of confidence for his plans to slash the budget deficit, which is the biggest in the European Union relative to the size of the economy.

He has what seems to be solid backing from Socialist members of parliament and their smaller Free Democrat allies. Together they control 210 of 386 parliamentary seats and there is no way to remove him without a rebellion in the Socialist Party.

Due to the tribal nature of Hungarian politics, in which a few tens of thousands of votes can decide elections, the Socialists see abandoning their prime minister as a surrender to Fidesz, which held power from 1998-2002.

Foreign investors believe Gyurcsany is the only person able to deliver on plans to reduce the budget deficit from 10.1 per cent of gross domestic product this year to 3.2 per cent in 2009.

"I don't think the prime minister will resign and I don't think his resignation would be a solution to the present political crisis. Fidesz's aim is to oust the government, and its aim can only be a snap election," said Krisztian Szabados, director of centrist think-tank Political Capital.

Hungary's forint currency has firmed recently to four-month highs on hopes Gyurcsany will stay in power and deliver on his policies.