* Tens of thousands rally in Dublin over new charges
* Anti-austerity candidate wins by-election seat
* Opposition says working class not feeling recovery (Adds details, second by-election result)
By Conor Humphries
DUBLIN, Oct 11 (Reuters) - Tens of thousands of people rallied against new water bills in Dublin on Saturday in Ireland's biggest anti-austerity protest for years as a candidate calling for a boycott of the charges was elected to parliament in a by-election.
After years of free water services, the centre-right coalition has decided to charge households hundreds of euros from the start of next year, an unpopular move just 18 months before the next election where the government parties hope to be rewarded by voters for an economic upturn.
Ireland has seen relatively few protests compared to other bailed-out euro zone members such as Greece and Portugal, but Saturday's protesters said the water charges were a step too far.
"There is absolute fury against what the government has imposed on the people," said Martin Kelly, 50, a rail worker holding a placard calling for the government to "stop the great water heist".
"They say this is the last bit, but it's the hardest. People can't take any more," he said.
Since completing an international bailout last year, Ireland has been bucking the trend in Europe's stalled economic recovery, with the government forecasting gross domestic product to grow by 4.7 percent this year.
The improvement has allowed the government to promise its first budget without any new austerity measures in seven years on Tuesday, but opposition groups say working people are not feeling the upturn.
More than one in 10 are unemployed and more than 100,000 mortgage holders in arrears in a population of 4.6 million.
RECOVERY FOR THE RICH
Paul Murphy from the Anti-Austerity Alliance, whose campaign was dominated by a call to boycott the water charges, won the parliamentary seat in the Dublin South West constituency that was vacated by a member of the governing Fine Gael party who was elected to the European Parliament.
Murphy, told supporters: "Recovery is for the rich, it's for the 1 percent ... it's not for the working class people." His supporters chanted: "No way, we won't pay."
Bookmakers had put left-wing nationalists Sinn Fein as heavy favourites for the seat and they were initially ahead, but lost by just under 600 votes.
Fifty-seven percent voted for candidates opposed to the water charges, while only 17 percent for the coalition parties.
But Dublin South West is among the most left-wing in the country, and the governing centre-right Fine Gael has topped most opinion polls this year, with support of 20-30 percent of voters.
Independent candidate Michael Fitzmaurice won a second by-election in the Roscommon-South Leitrim constituency, narrowly beating a candidate from centre-right opposition Fianna Fail.
The Dublin rally organised by trade unions, anti-austerity groups and opposition parties snaked for miles around the centre of Dublin in the biggest show of force by anti-austerity groups in at least four years.
Organisers said up to 100,000 took part. State broadcasater RTE cited a police estimate of 30,000. (Editing by Stephen Powell and Robin Pomeroy)
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