A group of men in masks beat up a man (R) who tried to stop them from removing barricades from a pro-democracy protest area in the Causeway Bay district of Hong Kong on October 3, 2014. Hong Kong has been plunged into the worst political crisis since its 1997 handover as pro-democracy activists take over the streets following China's refusal to grant citizens full universal suffrage. AFP PHOTO / ALEX OGLE (Photo credit should read Alex Ogle/AFP/Getty Images)

By Yimou Lee and Joseph Campbell

HONG KONG, Oct 3 (Reuters) - Violent scuffles broke out in one of Hong Kong's most famous and congested shopping districts on Friday, as hundreds of supporters of Chinese rule stormed tents and ripped down banners belonging to pro-democracy protesters, forcing many to retreat.

As night fell and news of the confrontation spread, more protesters headed for the gritty, bustling district of Mong Kok, considered one of the most crowded places on Earth, to reinforce.

Tens of thousands have taken to Hong Kong's streets in the past week to demand full democracy in the former British colony, including a free voting system when they come to choose a new leader in 2017.

Hong Kong leader Leung Chun-ying agreed to open talks with pro-democracy protesters but refused to stand down. He and his Chinese government backers made clear that they would not back down in the face of the city's worst unrest in decades.

Numbers dwindled at some protest sites in and around the Central financial district as rain fell on Friday and as Hong Kong people returned to work after a two-day holiday.

But in Mong Kok, where notorious Triad criminal gangs operate bars, nightclubs and massage parlors in the high-rise apartment blocks packed together over neon lights and open-air markets, about 1,000 Beijing supporters clashed with about 100 protesters, spitting and throwing water bottles in a side-show to the main protest movement.

Police formed a human chain to separate the two groups amid the wail of sirens.

Some demonstrators held umbrellas for police in the rain while Beijing supporters shouted at police for failing to clear the demonstrators.

"We are all fed up and our lives are affected," said teacher Victor Ma, 42. "You don't hold Hong Kong citizens hostage because it's not going to work. That's why the crowd is very angry here."

Benny Tai, a co-founder of the Occupy Central movement and a law professor at the University of Hong Kong, urged protesters to leave Mong Kok and regroup in Admiralty, the main protest site next to Central.

But more reinforcements were arriving as the three main protest groups threatened to call off any talks with the government unless police stopped the crowd violence against them.

Mong Kok is popular with visitors from the mainland but not as well known to Western tourists as the luxury shopping area of Causeway Bay, on the island of Hong Kong, where pedestrians were trying to remove protest barricades put up by Occupy protesters.

A female student protester wept on the street as she tried to protect the barricades.

"Is this really Hong Kong?" she asked. "Why has Hong Kong become like this?"

Leung refused to bow to an ultimatum from protesters to resign. Police have warned repeatedly of serious consequences if protesters try to block off or occupy government buildings in and around Central.

"The behavior of these protesters is illegal, extremely unreasonable and inhumane, and is even worse than that of radical social activists and almost complete anarchy," the Hong Kong government said in a statement, adding that people gathering in Mong Kok should leave.

Leung told reporters just minutes before the ultimatum expired at midnight on Thursday that Chief Secretary Carrie Lam would meet students soon to discuss political reforms, but gave no timeframe.

Pro-democracy demonstrators look on as they protect a barricade from anti-protesters in an occupied area of Hong Kong on October 3, 2014. (PHILIPPE LOPEZ/AFP/Getty Images)

'NEED TO WORK'

Lam on Friday urged protesters to go home.

"Sentiments are running high because of the prolonged strike, which leads to a higher chance of conflict," she said.

The protests have ebbed and flowed since Sunday when police used pepper spray, tear gas and baton charges to break up the demonstrations, which are the biggest since the former British colony was handed back to Chinese rule in 1997.

China rules Hong Kong through a "one country, two systems" formula underpinned by the Basic Law, which accords Hong Kong some autonomy and freedoms not enjoyed on the mainland and has universal suffrage as an eventual goal.

But Beijing decreed on Aug. 31 it would vet candidates who want to run for chief executive at an election in 2017, angering democracy activists who took to the streets.

While Leung made an apparent concession by offering talks, Beijing restated its resolute opposition to the protests and a completely free vote in Hong Kong.

Beijing, facing separatist unrest in far-flung and resource-rich Tibet and Xinjiang, is unlikely to give way in Hong Kong, fearful that calls for democracy there, especially if successful, will spread to the mainland.

Away from the streets, a hacker website called Anonymous Asia targeted several Hong Kong websites of pro-Beijing groups and Occupy supporters, temporarily disabling them on Friday.

There were also signs of tension between the protesters and government employees.

"I need to go to work. I'm a cleaner. Why do you have to block me from going to work?" said one woman as she quarreled with protesters. "You don't need to earn a living but I do."

Some protesters suspect authorities are trying to buy time with their offer of talks to wait for numbers to dwindle.

"I hope the chief executive can stop siding with Beijing and do one thing for Hong Kong people," Martin Lee, founding chairman of Hong Kong's Democratic Party, told protesters.

"He should go to Beijing and say 'I cannot really continue to run this place unless you give Hong Kong people what they deserve and what you have promised'."

The protests have been an amalgam of students, activists from the Occupy movement and ordinary Hong Kongers. They have come together under the banner of the "Umbrella Revolution," so called because many of them used umbrellas to ward off pepper spray used by police on Sunday.

The Occupy movement presents one of the biggest political challenges for Beijing since it violently crushed pro-democracy protests in and around Tiananmen Square in 1989.

Hong Kong's benchmark share index, the Hang Seng, plunged 7.3 percent in September, in part because of the uncertainty surrounding the protests. It was down 2.6 percent on the week on Friday. (1 US dollar = 7.7614 Hong Kong dollar)

A man walks through the encampment of pro-democracy student protesters displayed with umbrellas written with protest slogans outside the government complex in Hong Kong, Friday, Oct. 3, 2014. (AP Photo/Wally Santana)

(Additional reporting by John Ruwitch, Charlie Zhu, Donny Kwok, James Pomfret, Bobby Yip, Irene Jay Liu, Farah Master, Diana Chan, Clare Baldwin, Kinling Lo, Diana Chan and Jason Subler in HONG KONG; Writing by Nick Macfie; Editing by Robert Birsel)