Turkish riot police have fired volleys of teargas canisters into Istanbul's Taksim Square, the epicentre of protests against Prime Minister Recep Tayyip Erdogan, driving thousands into narrow side streets.

Police and water cannon vehicles advanced across the square, entirely clearing the north side after a day of skirmishes that had defied the authorities' efforts to restore full control on Tuesday.

Moments before their advance, police were confronted by protesters jeering and calling for them to leave the square.

Protests began two weeks ago over a proposed redevelopment of Gezi Park in Taksim Square escalated into nationwide anti-government demonstrations following a police crackdown.

The prime minister has urged the peaceful protesters to leave the square, saying he will meet those with "legitimate demands" on Wednesday.

He warned that warning that the environmental campaign was being hijacked by "an illegal uprising against the rule of democracy".

Police first re-entered Taksim Square early afternoon on Tuesday to remove signs of "occupation" erected by protesters. They fired tear gas and water cannon while being pelted with petrol bombs, fireworks and stones by a small number of protesters.

In a speech to MPs, Erdogan said protesters still in Gezi Park should understand they were being used in a "dirty game" by anti-government groups.

"It's not a place to be occupied…there is a big game being played using Gezi Park as an excuse," he said.

"They are trying to damage the Turkish economy, shut down the growth of Turkey. I want the Gezi Park protesters to understand that they are being used in a dirty game."

After days of blaming extremists and foreigners for provoking the protests, Erdogan extended his ire to "capitalist groups, interest groups and media groups", adding that Gezi Park protesters were "being used openly by people who want to damage the economy, investment and tourism".

Banners removed

The governor of Istanbul, Huseyin Avni Mutlu, said on Twitter that police were in Taksim Square only to remove banners and placards and the action was not targeting the removal of those people in the area.

A statement from Mutlu's office said the aim of the intervention was to remove the banners of various groups in the square, which were making it look as though it was under "occupation". This was "negatively affecting our country's image in the eyes of the world opinion and leading to reaction from within the society".

Mutlu later said that police would only remain in the square to prevent anyone surrounding the Ataturk Cultural Centre and Republic Monument.

In his to his MPs, Erdogan said that three young people had "lost their lives" in the protests, and a policeman had been "martyred".