It's just before 8pm in the Villeray district of Montreal. People wander in and out of the shops and bars, and traffic streams down the main road. But gradually the atmosphere changes, as clusters of people begin to congregate at the busy Jarry intersection. Some are in small groups, and others alone; hipsters in shorts and hi-top trainers mingle with parents in hiking boots and khakis. One thing unites them: they are all carrying pots and pans.

Within half an hour, the metro station is closed to traffic and the intersection is shut down. Hundreds of people are banging their pans, drowning out the sound of car horns from frustrated motorists. This clanking cacophony has become a nightly ritual all over Montreal: a remarkably successful street protest against a draconian emergency law enacted to crack down on what began as localised protest against tuition fees.

"This is about people power," said Carlos Luer, a 53-year-old children's worker who is attending the "casseroles" (pots and pans) protest for the first time. It wasn't the students' demands that brought him onto the street, but like thousands of others, he is motivated by bill 78, a loathed piece of legislation passed by the provincial government in Quebec in a failed attempt to stamp out the student protests ."This government said: 'Keep your mouth shut.' But they forget, these are the kids of tomorrow," Luer said.

This growing crisis has its roots in March 2011, when Quebec's finance minister, Raymond Bachand, announced that the government would increase tuition fees by C$325 (£203) a year for the next five years. Tuition fees in Quebec are lower than in any other province in Canada, and the government was facing a budget shortfall.

But the large increases in fees angered student groups, and in August a formal campaign was announced to overturn them. In November, 30,000 students defied the oncoming Canadian winter to rally in Montreal against the increases. By February, they were on strike, in small numbers at first, but then with more and more taking part. Daily marches against the increases were happening now, with some 200,000 people taking to the streets of Montreal on 22 March.

But still this might have remained a student-government issue. Polls showed that a majority of people in Quebec backed the increases. The protests also divided along linguistic lines: the English-language press in Quebec – a state where 80% of the population speaks French and which boasts a strong nationalist movement – was largely critical of the student movement, which had its roots largely in the Francophone universities.

Then, after growing frustrated with the student strikes and street protests, the government introduced bill 78. The emergency legislation made it illegal for more than 50 people to demonstrate spontaneously. Would-be protesters were required to submit an itinerary to police eight hours in advance. The law suspended universities' academic terms until August, and enforced strict restrictions on any individual or organisation blocking pupils access to class. Student groups breaking the law faced fines of up to C$125,000, individual protesters C$1,250.

Bill 78 came into effect on 18 May. A day later, responding to a call on Facebook, a large number of residents of Montreal came out onto balconies and streets, banging pots, pans and anything they could get their hands on. The casseroles protests, inspired by the cacerolazo movement in Chile in the 1970s, has continued every night since.

"I'm very surprised," said Kevin Audet-Vallee, 24, at a protest last Friday. "Now that the ordinary citizens are in the streets I think the government is really in trouble, because the middle class is in the streets. At first [critics of student protesters] were saying we were radicals. These are not radicals."

Police have been criticised for their heavy-handed application of bill 78. Mass arrests of more than 600 people during a night march last Wednesday in Montreal captured global media attention, but on Friday night they kept their distance.

"There's about 10,000 people," said Mark Recher, beating a small saucepan with a wooden spoon as he marched with his wife, Lucy. "I'm not afraid of being arrested. How do you arrest this?"

It's not the only headache the authorities in Quebec are facing. The Liberal party came to power with a majority win in the 2003 provincial elections, and the premier, Jean Charest, is in his third term, but there are signs that after nine years the government is creaking. In a blow to Charest, the education minister, Line Beauchamp, resigned on 14 May. There are legal challenges to bill 78, which some experts say is unconstitutional. Amnesty International says it is a breach of Canada's international human rights obligations. Beyond the tuition fee crisis, a long-awaited inquiry into allegations of corruption in Quebec's construction industry began last month.

The government's decisions in the coming days and weeks will be crucial to how the crisis plays out. Quebec's new education minister, Michelle Courchesne, is holding talks with representatives from the three groups behind the strike in Quebec City this week. Two of the groups have indicated they are willing to compromise. Martine Desjardins, president of the FEUQ, told the Guardian she was "sure we can resolve this conflict".

Further talks will take place on Wednesday. One wild card is the dramatic rise in popularity of Classe, a "directly democratic" group that the government originally banned from negotiations. The group, which has echoes of the structure of Occupy movements – small general assemblies giving every member a chance to vote on proposals – has demanded a total freeze on tuition fees in Quebec.

This hardline stance has catapulted Classe from being a relatively unknown organisation with 40,000 members to a sprawling phenomenon that now numbers 100,000 and claims to represent 70% of striking students. Gabriel Nadeau-Dubois, the group's charismatic spokesman, has become the face of the student protests.

For Nadeau-Dubois and Classe, this is not just about increases in tuition fees. The group is looking beyond the proposed end of the student strike this summer and has the long-term aim of abolishing university fees altogether.

"Even if the strike dies in August, we have already won a lot. We have already won the fact that a whole generation now has learned what is power, what is repression and what is social justice," Nadeau-Dubois told the Guardian. The strikes have "politicised a generation", he said, potentially bringing Classe's ultimate goal one step closer.

"Those people have learned collectively that if we mobilise and try to block something, it's possible to do it."