LISBON (AFP) - Workers at the Lisbon metro went on strike on Thursday and businesses came to a standstill across Portugal to protest against government austerity measures aimed at slashing the deficit and meeting the terms of an international bailout.

"We anticipate strong participation by workers who will also show their availability for a more general struggle," said Mr Armenio Carlos, secretary general of the country's largest trade union, the General Confederation of Portuguese Workers (CGTP), which organised the day of protest.

The CGTP, which is close to the Communist Party, and Portugal's second-largest union, the General Union of Workers (UGT), are discussing staging a general strike next month after organising two last year in March and November.

The metro system in the Portuguese capital closed late on Wednesday and will only re-open on Friday morning, forcing thousands of commuters to find an alternative way to get to work or school.

"We have total participation by metro workers in the strike," said Mr Carlos.

Walkouts were planned in various companies, while meetings were scheduled to be held at workplaces in various places in the capital during business hours which would slow activity.

Portugal's economy, which has been propped up since May 2011 by a bailout package from the European Union and International Monetary Fund bailout of 78 billion euros (S$127.2 billion), is expected to contract 2.3 per cent by the end of the year.

Unemployment is forecast to climb to a record 18.2 per cent.

Under the terms of the bailout agreement, Portugal has had to make deep cuts in spending and raised taxes which has led to a sharp rise on popular discontent, as in other European countries facing austerity measures.

But unlike in neighbouring Spain and Greece where strikes and protest have sometimes been marred by violence, demonstrations in Portugal have so far been peacefully.