Riot police battled stone-throwing demonstrators in Berlin for more than five hours in May Day clashes that stretched into the early pre-dawn hours.
The attackers also hurled petrol bombs and poured flammable liquids on police in the city's worst Labour Day violence in four years. Authorities said 237 police were injured - mostly bruises and contusions - while 14 suffered serious wounds.
A total of 289 demonstrators were taken into detention, where they face arrest on charges of bodily harm and rioting.
"The climate has worsened and that's casting its shadow over us," said Berlin's interior minister Ehrhart Koerting. "The violence was more severe than in the past. But for the most part they were not motivated by politics. They only wanted violence."
Overnight rioting in Berlin, and in Germany's second city Hamburg, came after a long day of mostly peaceful protests - despite scattered violence - across Germany as many vented their anger on the Labour Day holiday over the financial crisis.
The attacks began at dusk and came from a group of about 700 militants, who also threw slabs of pavement pulled from sidewalks at police in riot gear. They burned cars, and smashed bank and shop windows. The battles lasted til 2am (0000 GMT).
"Throwing slabs of pavement at police has nothing to do with any sort of general social unrest," Koerting told a news conference even though he acknowledged the crisis was behind a worsening in the public's general mood.
Authorities had braced for violence, with tension running high over the economic crisis and rising unemployment. More than 5,800 riot police from across Germany were deployed in Berlin.
Police also used tear gas and pepper spray against the militants, who marched under the slogan "Capitalism means war and crisis". They also chanted anti-capitalism slogans.
Mr Koerting said he was disappointed since annual violence on the Labour Day holiday had been on the wane over the past three years - ever since police shifted tactics from battling rioters to a policy of de-escalation.
"The number of violent criminals has clearly risen this year," he said. "It's a setback. Violence has reached new heights. The attacks started earlier and were more intense. The average age of attackers also rose. Most were in their mid-20s."
May Day is traditionally marked by union rallies in many European countries but the global economic downturn led to significantly larger crowds this year. Union leaders estimated 484,000 took part in 400 rallies around Germany.
The economic crisis aggravated public anger over a growing disparity in wages and a spreading gentrification in low-rent districts. The country is in its worst recession since World War Two with the economy forecast to contract by 6 per cent in 2009.
As a sign of the times, a group of protesters pelted the Finance Ministry building with brightly coloured paint bombs.
Violence also flared in the southern town of Ulm after leftist militants hurled bottles and stones at a march of about 1,000 neo-Nazis as police failed to keep them apart. There was also violence yesterday in Dortmund, Mainz and Verden.
In Hamburg, there were battles between police and leftists into the early hours of this morning. Six police were injured in attacks from about 100 demonstrators while 23 were detained. A car and trash containers were set on fire.