"Spanish revolution" camp defiant

BBC - Sarah Rainsford

Political rallies are banned under Spanish law on the day before elections to allow for a "day of reflection" - a ruling which was upheld by the electoral commission. Some protesters had said they feared a police crackdown, but Interior Minister Alfredo Perez Rubalcaba said the police were "not going to resolve one problem by creating another". As the midnight deadline to disperse approached, many of the protesters wore tape over their mouths to imply they felt they were being prevented from speaking.

The BBC's Sarah Rainsford, in Madrid, said there was a moment's silence as the ban came into effect, before the square erupted in jeers, cheers and chanting. Police were on the scene but did not intervene and the outdoor sit-in appears to be growing rather than ending, says our correspondent. What started as a spontaneous movement now looks like it could be here to stay for some time, she says.

Spain's 21.3% unemployment rate is the highest in the EU - a record 4.9 million are jobless, many of them young people. Prime Minister Jose Luis Rodriguez Zapatero has expressed some sympathy for the protesters, noting their "peaceful manner". "My obligation is to listen, be sensitive, try to give an answer from the government so that we can recover the economy and employment as soon as possible," he told radio Cadena Ser.

However, his Socialist government is expected to fare badly in Sunday's local and regional elections.