The rallies were organised by a non-political movement which claimed 500,000 marched in the country's capital and another 400,000 in the main northern city of Porto. There have been no official estimates of the crowds.
But the mood of the crowd was clearly political, calling for new elections with banners declaring "Portugal to the polls!" and "If you fall asleep in a democracy, you wake up in a dictatorship".
Another banner showed a picture of centre-right Prime Minister Pedro Passos Coelho with the caption: "Today I am in the street, tomorrow it will be you."
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Portugal was granted a financial rescue package worth 78 billion euros ($103 billion) in May 2011, in exchange for a pledge to straighten out its finances via austerity measures and economic reforms.
Lisbon has to reduce its public deficit to 4.5 percent of GDP this year, but the government recently conceded it may be impossible for it to reach that target given the continued recession.
Finance Minister Vitor Gaspar has said the economy is expected to contract around two percent this year, double an earlier forecast.
The organisers of Saturday's march are galvanised by their opposition to the so-called troika of public creditors -- the European Union, the European Central Bank and the International Monetary Fund -- who bailed out Portugal.
"This demonstration is a clear sign that 'the troika' and the government are not wanted in this country," said Joao Semedo, the leader of a far-left bloc.
The march included groups of teachers, healthcare workers and pensioners who have been especially hard hit by the budget cuts.
After cutting salaries and pension benefits in 2012, the government this year has declared a general tax increase and expects to impose further cuts of some four billion euros.
