Hungarian Prime Minister Ferenc Gyurcsany rejected opposition calls to quit and vowed to press on with tough economic reforms this evening as Budapest remained on edge after violent anti-government protests.
The riots, in which over 150 people were hurt, followed the leak of a tape on Sunday in which Mr Gyurcsany said he and his Socialist party had lied for four years about Hungary's budget in order to win a general election in April.
Thousands of people took to the streets of Budapest late yesterday, occupying and setting fire to the state television building and fighting with riot police in the first such violence since communism collapsed at the end of the 1980s.
Higher taxes and fees for healthcare and university tuition had prompted protests before the release of the tape sparked a violent backlash that weakened the Hungarian forint and other currencies across central Europe.
"The longest and darkest night of the third Hungarian republic is behind us," Mr Gyurcsany said on television referring to the period in Hungary following the collapse of Communism.
"This is not a revolution, this is not 1956, this is the betrayal of our great national history," he added later at a news conference referring to the Hungarian uprising against Soviet occupation 50 years ago.
Thousands gathered again at parliament on Tuesday - though there were no reports of violence so far - and there are also plans for a big student demonstration on Thursday, seen attracting 10,000 people, which the organisers fear could be hijacked by far-right parties.
The soaring budget deficit has forced European Union member Hungary to abandon plans to join the euro single currency in 2010, with analysts now saying 2014 is more realistic.
A defiant Mr Gyurcsany, facing the biggest challenge in his two-year premiership, told Reuters that resigning was out of the question and he would continue with the tough reforms.
"I had spent three minutes on Sunday night thinking about whether I should step down or whether I had a reason to step down, and the conclusion I came to is that absolutely not," Mr Gyurcsany, a 45-year-old millionaire, said.
The protests came two weeks ahead of local elections on Oct. 1 and follow a slump in the ruling Socialist Party's popularity to 25 percent in polls from 40 percent at the election.
The main Fidesz opposition urged the prime minister to go amid what it called a "moral crisis".
"A pathological liar can not step over his shadow," Fidesz leader Viktor Orban told a news conference.
The prime minister has said his taped comments to party members were intended to force them to admit to their mistakes and a wake up call to back much needed reform measures.
Analysts said Mr Gyurcsany was likely to hang on for now, but said the uproar could ultimately cost him his job.