It began as a series of peaceful protests calling for reform of the Chilean government's education system, with students staging mass kiss-ins, dressing up in superhero costumes and running laps around the presidential palace. But on Thursday these surreal protests exploded into violence as school and university students clashed with police and seized a TV station, demanding the right to a live broadcast in order to express their demands.

The Chilean winter, as it is being called, appears to have captured the public mood, just as the Arab spring did six months ago.

After a day of street clashes, 874 people had been arrested and department store in the capital was smouldering after being attacked by protesters. Outrage against the rightwing government of Sebastiàn Piñera boiled over, with polls showing he is more unpopular than any leader since the fall of former dictator Augusto Pinochet.

Striking school students led the charge as they tried to march on the presidential palace early on Thursday, only to be thwarted by hundreds of police in riot gear and clouds of teargas. Tucapel Jiménez, a member of the Chilean congress, called for sanctions against government authorities who authorised what he called "brutal repression" by riot police.

"This is unacceptable, the centre of Santiago is a state of siege," said university student leader Camila Vallejo, tears rolling down her face after being doused in teargas. "The right to congregate has been violated."

"I don't see any other solution than a general referendum," said Giorgio Jackson, president of the Catholic University student union as he described the distance between student demands and the government offer. "There are some points of agrement, but clearly there are other points that are very relevant and in which we have grand differences." News coverage of students being gassed and hauled off buses by police squads led Vallejo to call for the resignation of Rodrigo Hinzpeter, Chile's interior minister. Government officials insisted the students did not have a permit to march and defended the police reaction as necessary to maintain business as usual in Santiago. Government spokesman Andrés Chadwick estimated vandalism damage at $2m.

Marches were held in other big cities, including Valparaíso, Concepción and Temuco. Protests continued into the evening with vandalism and bonfires in various parts of the capital, snarling traffic and highlighting the growing wave of discontent.

La Polar, a retail chain recently charged with saddling consumers with outrageous interest rates on overdue accounts, was set alight. The torching was widely denounced by protest groups, but was the latest evidence that long dormant Chilean youth are rebelling against the orthodox free market ideology that dominates everyday Chilean life.

In recent years, for example, it was common for private hospitals to impose a 100% surcharge for babies born outside business hours. Students have long insisted for-profit universities and schools should receive no government subsidies.

The protest movement, organised largely through Facebook and Twitter, has shaken the Chilean political establishment as up to 100,000 students, usually costumed and peaceful, have marched.

With a mix of music and fancy dress, the students have used the streets of the capital as a stage for acts ranging from a 3,000- person re-enactmant of Michael Jackson's Thriller dance to a "besa-thon", where young couples kissed for hours in front of La Moneda, the presidential palace.

For two months hundreds of high schools have been seized by teenage students. Despite warnings from the government that tens of thousands of students would be forced to repeat the entire school year, high schoolers continue to demand an end to for-profit educational institutions, lower interest rates on student loans and a bus pass valid year round.

An opinion poll on Thursday put Piñera's popularity at 26%. Opposition coalition La Concertacion had an approval rating of just 16% as the range of popular complaints appears to grow daily.

One year ago Chile was celebrating its new-found unity and the Piñera administration was lauded by the world media for the teamwork used to save 33 trapped copper miners. Today the heroes are the student leaders, including Vallejo, who wields enormous political power.

Piñera has sacked his education minister and promised billions in new government spending for education in an unsuccesful attempt to quell the protests.

After being teargassed on Thursday, Vallejo called on citizens to show support for the striking students by banging pots and pans at 9pm – a reminder of the call to the streets used in the Pinochet era. Her call spread like wildfire on social networks and led to a night of clanging celebrations, spontaneous street festivals and a national realisation that Chile is living a historical moment, with a movement that cuts across traditional social and class boundaries.