Hundreds of riot-police have surrounded a building occupied by anti-G8 protesters in central London, before a summit of world leaders in Britain next week.

The squatting activists had taken over the unused office block in Beak Street as a temporary base.

London's Metropolitan Police said it had a search warrant for the address.

"People inside the property...are free to leave but will be searched," the police said on Twitter on Tuesday.

The police operation came as around 150 protesters paraded through central London, banging drums in a "Carnival Against Capitalism" organised by the group Stop G8.

About 70 police in riot gear were at the scene of the protest and there were several scuffles between officers and demonstrators.

Companies targeted

Stop G8 issued a map of 100 potential targets for people to "show their anger" last month.

The anti-capitalist group identified offices of financial organisations such as banks, hedge funds, defence manufacturer BAESystems and mining and energy companies including ArcelorMittal and BP.

Leaders of the world's richest economies including US and Russian presidents Barack Obama and Vladimir Putin are due to meet at Lough Erne golf resort in Northern Ireland on June 17-18.

A huge security operation has been launched ahead of the summit, with more than 3,500 officers drafted in from the British mainland.

No-fly zones will be imposed over parts of Northern Ireland during the summit and surveillance drones will be used to guard key sites.

In 2009, British police made more than 100 arrests after protests by tens of thousands of people to coincide with a G20 summit in London turned violent.