Many took a day off work or school yesterday to join the protest, after watching on television how riot police fired 87 canisters of tear gas and used pepper spray and batons against protesters the previous night. Police said 41 people had been injured over the past three days.

Business and financial markets were impacted on the first working day of the civil disobedience movement, with the benchmark Hang Seng Index falling the most in seven months. It dropped up to 2.46 per cent in the morning session, the biggest intraday loss since February 4, before ending the day down 1.94 per cent.

Several main roads on Hong Kong Island were closed to traffic. Many shops in the affected districts, particularly those selling jewellery and luxury goods, closed for the day and dozens of bank branches were also shut.

Many groups, including the Hong Kong General Chamber of Commerce and the Catholic Diocese of Hong Kong, urged both sides to exercise restraint and restore social order.

The huge public backlash put the government on the defensive. Chief Secretary Carrie Lam Cheng Yuet-ngor strongly hinted that the government would postpone the next round of public consultation on the 2017 chief executive election, which was scheduled to start next month.

"Having considered [the recent development], we understand that the current social atmosphere is not conducive for such a consultation exercise," Lam said. "So we would assess the timing and the situation further and do it at an appropriate time."

The government also decided to cancel the National Day fireworks display tomorrow.

A spokeswoman for the foreign ministry said Beijing was firmly opposed to "all illegal activities that undermine rule of law and jeopardise social harmony".

She also reminded foreign governments not to interfere in Hong Kong's affairs.

Last night, the White House said the US government was closely watching the situation in Hong Kong and urged the authorities to show restraint and protesters to be peaceful.

The rare confrontation in the normally peaceful city grabbed headlines around the world. Australia, Italy and Britain issued travel advisories for people visiting Hong Kong.

No immediate solution to the deadlock was in sight. Protesters continued to demand the resignation of Chief Executive Leung Chun-ying and for Beijing to retract its decision on the 2017 chief executive poll, which would restrict the number of candidates to two or three approved by a 1,200-strong nominating committee.

Occupy co-organiser Dr Chan Kin-man called for the public to sustain the protest movement. "Hongkongers are fearless towards tear gas, so I would not suggest protesters retreat at this moment," he said, adding they should stay put at least until tomorrow, National Day.

At least three senior government advisers, including Francis Ngai Wah-sing who is an associate member of the Central Policy Unit, resigned in protest at the police actions on Sunday.

On the opposite side, Robert Chow Yung, a key member of an anti-Occupy group, questioned what the organisers hoped to achieve. "So Occupy Central has happened now. But what next?" he said.

The Real Estate Developers Association also expressed its regret over the protests and said the movement would "ultimately affect the livelihoods of citizens and businesses who may not share the same perspective".

Executive councillor Fanny Law Fan Chiu-fun called for calm. "The National People's Congress Standing Committee has set the framework for the 2017 chief executive election and it's not realistic to expect it to change," she said. "We should set aside our differences to achieve universal suffrage for 2017 within the framework."

Protesters, meanwhile, have discovered a new - and most unlikely - symbol for the Occupy movement: the humble umbrella. The brollies were used to fend off pepper spray during Sunday's clashes, giving the protests a catchy new name: "The Umbrella Movement".