EUROPEAN Union creditors belatedly agreed to keep Greece’s banks open yesterday after a parliamentary vote backing austerity laws that split the ruling Syriza alliance.

The divisive Act of parliament passed by 229 votes to 64 on Wednesday night despite a revolt by 38 Syriza MPs and opposition from Syriza’s governing partner party Independent Greeks (Anel).

Its provisions include cutting pensions, raising VAT to 23 per cent, including on the previously exempt islands, and moving state assets into a €50 billion (£35bn) holding company as collateral.

Prime Minister Alexis Tsipras was forced to rely on the support of the pro-austerity parties whom voters rejected in favour of Syriza at January’s election.

“Today, parliament took the first important step for the deal, voting for the difficult measures,” said government spokesman Gabriel Sakellaridis.

“But the results of today’s vote constitute a serious division in the unity of the Syriza parliamentary group.”

Anti-austerity demonstrations outside parliament attracted some 12,000 — the largest since Syriza’s election.

But peaceful protest gave way to violence after nightfall as hundreds clashed with riot police, trading teargas with petrol bombs.

Among the rebels were serving Energy Minister Panagiotis Lafazanis and former finance minister Yanis Varoufakis, who was forced out of office last week by the other eurozone finance ministers.

Russian Insider columnist Alexander Mercouris predicted before Wednesday’s vote that Mr Lafazanis would be shuffled out of the Cabinet and that his agreement to route a Russian gas pipeline through Greece would be cancelled.

The Act was a precondition for final negotiations on a new bailout package for Greece’s banking system.

A four-week loan that European Commission President Jean-Claude Juncker declared yesterday will allow Greece to pay €5.6bn in debts to the European Central Bank and the International Monetary Fund.

It may also allow Greek banks to reopen more than two weeks after they shut in the face of a bank run as liquidity ran low. Since then depositors have been limited to cash machine withdrawals of €60 (£42) a day.