More than 150 protesters have staged an occupation of Lambeth Town Hall after councillors were forced to move out of the official chamber and hold a vote on making cuts in private.

Demonstrators ranging from trade unionists to pensioners occupied the chamber for more than an hour, taking their seats in what they called a "People's Assembly" and listening to speeches from those opposed to cuts in services including libraries, adventures playgrounds and schools.

Members of the Labour-run council, meeting to decide how to make £79m of savings over three years, had walked out of the meeting amid heckling from the public gallery by a number of people, who then joined the occupation in the chamber. There had been scuffles earlier as security guards tried to stop demonstrators outside the building attempting to enter.

"We don't accept the argument that councillors have to make these cuts," said Marsha-Jane Thompson, a member of the Unison trade union who took part in the occupation.

"If all the Labour-controlled councils up and down the country united together and refused to do [make the cuts] then it would send a very strong message that we don't have to be paying back the deficit in the way that we are."

She claimed that the council had behaved undemocratically and wanted to exclude the voices of locals campaigning to preserve services and funding.

Alex Bigham, a Labour councillor, said that the meeting had been moved to an assembly room after it was disrupted by "quite organised protesters".

"We had a very truncated meeting about a package of measures that would normally have lasted for a number of hours," he said.

"What has happened is that the government has cut our funding by a third," he added, saying that the council had been "forced" to take money from the public balance sheet or reduce back office spending.

"We are extremely angry that we have do that. I understand the protesters are angry but in many ways their actions are misdirected. They should be taking their protests elsewhere, such as to the Treasury."

Other councils around London have also been holding meetings to decide how to slash tens of millions of pounds from their budgets at a time when local authorities face an average 9.9% cut in government formula grant funding in 2011/12.

Tory-controlled Hammersmith and Fulham council in west London has been lining up £65m in savings over three years while Cabinet members at Camden council in north London are to recommend cuts to be voted on in future.

In Lambeth, services that are likely to see a reduction in funding or could be stopped include the park ranger service, highway maintenance and school crossing patrol services that currently serve 24 schools. Three quarters of public toilets could also shut down.