Homeless people in Manchester have been banned from entering the city’s main public library or using the library toilets after they set up a protest camp outside.

The city council said the ban came after protesters attempted to storm the central library and occupy the premises on Tuesday, distressing children and families.

But protesters said they were being treated as “second-class citizens” and “members of the underclass” and accused Manchester city council of social cleansing.

Homeless people in Manchester have set up camp outside the library and town hall to demand housing. Photograph: Helen Pidd

Two protesters were arrested on Tuesday evening. One was quickly released without charge and the other is on bail but remains under suspicion of assaulting a security guard from the private firm G4S, according to Greater Manchester police.

The group has been camping in the city centre for three weeks after an anti-austerity demonstration on 15 April.

About 30 homeless people originally erected tents outside the town hall in Albert Square. But after the council won a possession order against them they moved around the corner to St Peter’s Square, a historic protest site near to where the Peterloo massacre took place in 1819.

Kath France, 27, who has been homeless for seven months, said she was disgusted at being banned from using the facilities at the central library. “I want equal rights. I want to be able to use the library just like everyone else,” she said. A trained joiner, she said she had been evicted from her council flat after becoming disabled with lumbar degenerative disc disease and having her benefits sanctioned.

Members of the public have largely supported the camp, with many bringing food and bedding to the protesters. Katrina Lawrie, a support worker from Wigan, said the library ban was “a sign of a society divided. They are trying to make an underclass of people who aren’t even worthy of using a public library or toilets.”

Dr Steven Peers, another supporter, said: “G4S, acting on the instructions of Manchester city council, are denying access to the public library based on their profiling of homeless people. This type of exclusion is a breach of human rights and is discrimination against vulnerable members of our society.”

On Wednesday the Guardian witnessed a member of the public being refused access to the library after he stopped to talk to protesters.

Student Anthony Johnson, 28, said a police officer guarding the library’s front door wouldn’t let him in. “I come to the library every week to do my college work and now I’m not allowed in - just because they saw me speaking to the some homeless people” he said. “I think it’s disgraceful.”

Student Anthony Johnson was not allowed access to the central library after officers saw him talking to the homeless protesters. Greater Manchester police later said it was ‘a misunderstanding’ and let him in. Photograph: Helen Pidd

Johnson was allowed access after an intervention from a senior officer, who described the incident as “a misunderstanding”. Det Insp Phil Spurgeon said the G4S security guards employed by the council could legally cite a library bylaw to deny individuals access to the library. “My officers are just here in case it kicks off,” he told the Guardian.

A spokesman for Manchester city council said it had decided not to allow the protesters into the library following skirmishes on Tuesday which led to the facility closing early.

“Unfortunately, the protesters had to be removed from central library on two occasions yesterday, after physically attempting to force their way into the building in order to occupy it, causing distress to children and families using the library as well as members of city council staff. Members of the group were arrested for public order offences and assaults on security staff,” he said in a statement.

“Following these incidents, we cannot risk any more potential disturbances affecting library users, and so we are not allowing members of the group inside the building, but as we have made clear to them they are still able to use the public toilets on Lloyd Street - less than a minute’s walk away – as they have done throughout the entire duration of their protest.

“These incidents sadly led to us having to close the library earlier than usual, and we have also had to limit public access to the main Shakespeare Hall entrance of the library as a result of ongoing security concerns caused by the presence of the group. We have no choice other than to apologise to those library users who need to use the building and have been inconvenienced as a result of this.”

The spokesman said the protesters had so far refused offers of help from the council’s homeless service and had refused two invitations from the council to talk about how to tackle Manchester’s growing homelessness problem. He said they had been offered temporary accommodation while a full assessment of their needs was made and more permanent accommodation found.

Poster at the homeless protest camp in St Peter’s Square. Photograph: Helen Pidd

Last Friday the council obtained a court order for possession of land which covers St Peter’s Square and adjoining buildings. “This enables us to move the protesters from the square, and we are working with the court bailiffs and GMP [Greater Manchester police] to enforce the order as soon as possible,” said the council spokesman.

On 14 May the protesters will appeal against the possession order. Ben Taylor, of WTB Solicitors, representing the group, said he was waiting to hear from the council to see whether they would wait for the outcome of the appeal before enforcing the possession order. Any move to carry out the eviction before then would “render the appeal redundant and would be contrary to the interests of justice” he said.

The camp residents have called a solidarity protest for 2pm on Saturday.