Anti-capitalist protesters are locked in a legal battle with Mayor Michael Bloomberg, after Occupy Wall Street, their New York protest camp, was demolished and demonstrators were evicted.

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© Getty ImagesWorkers clean-up Zuccotti Park after New York City police in riot gear removed Occupy Wall Street protesters

Lawyers for the protesters, who have inspired dozens of demonstrations around the world, were arguing in New York supreme court that a police raid on the camp early Tuesday morning was illegal.

Hundreds of NYPD officers wearing riot gear burst into Manhattan's Zuccotti Park at 1am, arresting more than 140 people inside the two-month-old camp and about 60 outside in chaotic scenes.

As they tore down tents, seized tonnes of equipment and binned the 5,000 books in the camp's library, police blocked photographers from observing the raid and physically removed reporters from the site.

Mr Bloomberg said he had ordered the eviction because "health and safety conditions became intolerable" in the park and protesters were encroaching on the rights of others.

"New York City is the city where you can come and express yourself," he told a press conference. But he added: "No right is absolute and with every right comes responsibilities".

It was the most serious setback so far to the "Occupy" movement, which over the past eight weeks has spawned protests against the economic status quo from California to New Zealand under the rallying cry "We are the 99 per cent".

Scuffles broke out on Tuesday night and several journalists were arrested as police blocked protesters trying to re-enter the park, and lawyers debated extending an injunction against the eviction, which was issued by a judge woken in the early hours.

Many had not rested since 1am, when a text message was sent out to supporters. "URGENT: Hundreds of police mobilising around Zuccotti," it said. "Eviction in progress!"

Amid chants of "Whose park? Our park!", demonstrators screamed at police and scrambled to keep hold of their belongings. Some furiously remonstrated while being handcuffed with plastic cable ties.

A hard core chained themselves to tables and trees in the camp's "kitchen" area and had to be cut out. Claims that some had been pepper sprayed were denied by police.

Ray Kelly, the New York police commissioner, said he was "proud of the officers' professionalism" in the face of taunts from protesters.

"Operationally, it went well," he said.

Most of those arrested were charged with disorderly conduct or resisting arrest. Ydanis Rodriguez, a Democratic city council member, was among those detained by police.

During the raid, the nearby Brooklyn Bridge was closed, apparently to block supporters arriving. Subway train stations around the camp were closed and police helicopters patrolled the skies. Later, private security guards were seen protecting high street bank branches.

The evicted demonstrators marched north, pursued by police. Jason, 27, said: "The cops were following, shoving us from behind and saying it was illegal to walk slower than them".

At dawn they gathered half a mile away at Foley Square to plot their next move, using the "people's microphone", in which the entire crowd repeats each speaker's sentences so that all can hear.

The group says it has no leaders, but Nicholas, 25, did most of the talking. "This only feeds us, it only makes us stronger," he told The Daily Telegraph, while rolling a cigarette.

Kyle Szlosek, 21, travelled the 100 miles from Philadelphia, where he is involved in the "Occupy Philly" movement, to help his comrades. "I was born into a world that sucks," he said.

Some New Yorkers, however, were happy to see the camp removed. Businessmen from nearby companies described the jetwashed and bleached pavements as "a beautiful sight".

Outside City Hall, a woman in a suit shouted at the protesters: "You people stink! Take a shower! Get a job" Asked by the Daily Telegraph for an interview, the woman said: "No, I'm a cop - get away".