(Updates with injuries, damage, reaction)

By Karolos Grohmann

ATHENS, March 8 (Reuters) - At least seven people were injured on Thursday when Greek youths protesting against university reforms fought with riot police in the worst clashes seen in central Athens in years, police said.

The youths hurled petrol bombs and stones at police, who retaliated by firing tear gas as parliament voted in a new education bill, turning the Greek capital into a battleground for several hours.

"Seven people were rushed to hospital but there are others the ambulances cannot reach," a police official said. "We have brought in 40 protesters for questioning.

A Reuters reporter saw at least 10 protesters with blood wounds during the clashes, which broke out when scores of youths marching against the bill attacked police outside the parliament building with rocks and bottles.

Police said about 8,000 students and teachers marched to protest against the bill which regulates university funding and eases police access to campuses, chanting anti-government slogans and holding banners reading "The people will not allow unpopular laws."

The youths also broke dozens of shop windows, destroyed bank machines and damaged the front of the luxury Grand Bretagne hotel. They set fire to a presidential guard post at the Monument to the Unknown Soldier in the central Syntagma square.

"It is a shame, it makes me want to cry. How can they do this to our national monument," Presidential Guard chief Theodoros Kouskos told Greek television.

The clashes, just metres (yards) from parliament, blocked the city centre and forced tourists to take shelter indoors.

"The way the government has passed this law, it is no surprise that we have this kind of violence. Students have no other way to react but this," teacher Manolis Grigoriadis, who took part in the rally and watched the clashes, told Reuters.

Students and teachers say it does not address serious issues such as under-funding but instead does away with university asylum, an emotive issue since the 1967-1974 junta violently put down a student revolt with tanks, killing many in 1973.

After months of protests, hundreds of university departments still remain shut, taken over by students opposing the reforms.

The conservative government says the bill will help make Greece's troubled universities more competitive.

The clashes broke out right after parliament passed the government's education reform bill with 164 votes in favour and 117 against with 19 abstentions.

The bill was introduced by the conservatives after plans to amend the constitution and allow the creation of private universities fell through when the opposition walked out of the house. Its support is necessary for any constitutional change.

Analysts have said the education bill, which brings no radical reforms to Greek universities, was a face-saving tactic in what could be an election year.

The conservatives, who came to power in 2004, have denied press speculation of snap elections ahead of the end of their term in early 2008.

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