Thousands of protesters on Saturday joined a demonstration in Greece's second city Thessaloniki against a Canadian gold mining project which locals say will cause irreversible damage to the environment.

Around 15,000 protesters shouted slogans against the government headed by conservative Prime Minister Antonis Samaras in the largest demonstration on the issue so far.

"Junta, police, Antonis Samaras," many chanted.

Among the protesters, estimated at around 9,000 by police, was a group who marched as grim reapers, dressed in black and carrying scythes.

"Gold is not bringing us closer, it is killing us," they sang.

Citizens' groups, backed by the radical leftist party Syriza that is now the second largest in parliament, have been trying to scupper the project since 2011, when the government allowed Hellenic Gold -- a subsidiary of Canadian firm Eldorado Gold -- to dig in the northern Halkidiki peninsula.

The prime minister on Saturday insisted that the government did not intend to back down.

"The final decision has already been made over the Halkidiki investment," he told financial daily Axia.

But Samaras said the government had yet to decide over a second Eldorado Gold concession in neighbouring Thrace which has also met with local opposition.

"The gold investment in Perama, Thrace is different. We are examining new evidence because this is a different situation," he said.

Last month, dozens of hooded activists firebombed a Hellenic Gold worksite in Skouries, Halkidiki, injuring a guard and damaging equipment.

An operation last week to arrest suspects allegedly linked to the attack caused additional anger when riot police fired tear gas into a village.

Four people arrested during the raid will be tried on March 20.

The mayor of Thessaloniki and local authorities support the Hellenic Gold project, which is expected to create hundreds of jobs in the recession-hit country, whose the unemployment rate has topped 26 percent.

Critics say the project will not only drain and contaminate local water reserves but also fill the air with hazardous chemicals including lead, cadmium, arsenic and mercury.

A picturesque and forested peninsula, Halkidiki is a popular destination for tourists, particularly from Russia and the neighbouring Balkan states.

Another Canadian company, TVX, began an operation in Halkidiki nearly two decades ago before pulling out in 2003.