Tens of thousands of people joined an anti-government, pro-democracy march Wednesday afternoon as Hong Kong celebrated the 12th anniversary of its return to China.

Organisers predicted beforehand that around 150,000 people would attend the march, the turnout boosted by growing discontent over the economic downturn and dissatisfaction with Hong Kong's Beijing-appointed leader Donald Tsang.

The demonstration was just one of several which took place on the July 1 public holiday - a day when the Hong Kong public traditionally express their grievances or support for Hong Kong's government and Beijing.

Earlier in the day around 12 protestors were involved in a minor scuffle with police as they tried to stage a rally in the Wan Chai area of Hong Kong where an official flag-raising ceremony was being held to celebrate the handover.

Later Wednesday morning, around 40,000 people joined a pro-government rally organised by an alliance of pro-Beijing groups which was initially led by Tsang.

However, the anti-government, pro-democracy march was expected to attract the most support in the city of 7 million, with thousands gathering from early afternoon.

Estimates of the turnout were expected later Wednesday but observers said tens of thousands appeared to be joining the main demonstration of the day.

Domestic issues were among the chief concerns of many of those taking part. A large contingent of civil servants unhappy at being asked to take a 5.8 percent pay cut were also expected to join the march.

In another demonstration ahead of the main march, thousands of investors who had lost money with Lehman Brothers also marched to the government headquarters demanding the resignation of Tsang.

The predicted huge turnout of the anti-government and pro-democracy march is believed to be of concern to Beijing officials who are reported to be keeping a close watch on the event.

Beijing officials are said to have been asking contacts in Hong Kong about the anticipated turnout and appeared concerned a huge crowd would undermine Tsang and embarrass China in a year of sensitive anniversaries.

Democratic Party chairman Albert Ho said China's leaders were 'afraid they will lose face if many people hit the streets'.

Tsang angered some Hong Kong residents ahead of the June 4 anniversary when he indicated that most people in the city wanted to forget the massacre and concentrate on China's economic success in the years since.

In 2003 and 2004, an estimated 500,000 people took to the streets for the marches, undermining and arguably bringing an end to the administration of Tsang's unpopular predecessor Tung Chee-hwa.

Hong Kong reverted to Chinese sovereignty in 1997 but, unlike the rest of China, maintains freedom of speech and freedom to demonstrate under a 'one country-two systems' arrangement.