Aung San Suu Kyi, the Burmese pro-democracy leader and Nobel prizewinner, made an impassioned appeal to her followers on Wednesday "to continue the march on the road to freedom", on the eve of the first visit by a British foreign secretary in more than half a century.

William Hague's trip is intended as a reward for the regime for political reform and an encouragement to do much more. In a statement issued while he was on the way to Burma, the foreign secretary said: "The release of some political prisoners, the dialogue with Daw Aung San Suu Kyi, improvements in media freedoms, and changes to legislation that have enabled the National League for Democracy to participate in this year's byelections are welcome reforms which we urge the government to build on."

Hague is due to fly into the capital, Naypyidaw, to meet the Burmese leadership, including the new president, Thein Sein. He will then fly to the southern city of Rangoon for talks with leaders of the country's ethnic minorities. He will have two meetings with Aung San Suu Kyi: a private dinner today and more substantive discussions tomorrow, followed by an encounter with another famous former political prisoner, an actor and director known as Zaganar, who was among 250 political prisoners freed in October as part of the government's political reforms.

"I am visiting the country to encourage the Burmese government to continue on its path of reform, and to gauge what more Britain can do to support this process," Hague said.

"Further steps are needed that will have a lasting impact on human rights and political freedom in Burma. In particular, we hope to see the release of all remaining political prisoners, free and fair byelections, humanitarian access to people in conflict areas, and credible steps towards national reconciliation."

During yesterday's celebrations of Burma's independence day at her party's headquarters, Aung San Suu Kyi told members of her National League for Democracy party (NLD) that "all Burmese people deserve freedom".

"We have to struggle for more freedom. What we do is anchored by our belief in freedom. Sometimes we face many difficulties. Now we cannot say we are free so we must work for more freedom," she said.

Burma is undergoing rapid political changes as a new nominally civilian government pursues what a key aide to Thein Sein told the Guardian was "a mission of democratisation". However, many analysts and campaigners are sceptical about the depth of recent reforms and the willingness of the military, which has ruled the country since 1962, to relinquish power.

Hague's visit follows that of Hillary Clinton, the US secretary of state, last month and Aung San Suu Kyi's recent decision to stand in April's parliamentary byelections. A general election was held in November 2010 when she was still under house arrest and was boycotted by the NLD. Since then, however, following reforms, the NLD has decided to enter the new national assembly, though it is dominated by the army.

Min Yaing, a founder of the youth protest movement Generation Wave, said he welcomed the succession of foreign diplomats visiting Burma, which is also known as Myanmar, because they would counter Chinese influence in the country.

With American and European Union sanctions in place, Beijing has been able to build a major presence in Burma in recent years.

"This is good for our movement. Before, the government was just looking to China all the time. Now they are not just listening to one voice," Min Yaing, 31, said.

Thi Ha Saw, editor of a newspaper in Rangoon, added that Hague's visit would "help reformers within the regime" as it would be seen as "evidence of recognition by western powers".

There was a danger of a backlash against the reforms, he warned. "The president is a moderate but there are hardliners who could take over. There is pressure to move fast and get as much change done as possible so a point of no return is reached," Thi Ha Saw told The Guardian.

Nay Zin Latt, the president's political adviser, acknowledged resistance within the regime to recent changes. Beyond the gradual acceptance of the NLD as a legitimate opposition party, there have been new labour laws and a reduction in media censorship as well as reduced surveillance of democratic activists. "There is always resistance to change. But it is a question of the speed of that change and differing points of view. No one within the government is opposing change entirely. Some want it to go faster than others," Nay Zin Latt said.

Sceptics point out that somewhere between 600 and 2,000 political prisoners remain in jail and that military operations are still continuing against Burmese ethnic minorities. There was widespread disappointment at the limited extent of an amnesty announced on Tuesday which saw sentences cut but resulted in the actual release of only between 10 and 30 political prisoners.

None of the most important dissidents or ethnic minority leaders currently held in extremely harsh conditions on often arbitrary or trivial charges were released. The limited scope of the amnesty, the fourth in a series that has seen more than 200 prisoners freed, has put Aung Sun Suu Kyi in a difficult position, with many campaigners unhappy at continued dialogue with the authorities while fellow activists remain in jail.

"This is just playing a political game. If they were serious they would release everybody," said Than Naing Oo, who was released from Insein jail near Rangoon on Tuesday. He was serving a three-year sentence for distributing pro-democracy leaflets.

Hla Soe, a politician from the Arakhai minority, said that he distrusted the government and the "deal" they had done with Aung San Suu Kyi. "The government is still ignoring ethnic rights. That is what I want to tell Mr Hague and the international community," he said.

However, on one central street in Rangoon last night, crowds witnessed a daring bid to force the speed of change as images of police repression during unrest in 2007 were projected on a big screen as part of a film festival. Inside a nearby conference hall thousands had gathered to watch a series of politically charged films that provoked gasps and applause from an audience unused to such open defiance of Burma's strict censors. A banner read: "Free Art, free thought, freedom."

The event was organised by Zaganar, who is due to meet with Hague. "This is free expression. This is a step in the right direction. And we are not afraid. We are never afraid," he declared.

Min Thai Ke, winner of best short film for his depiction of the plight of the poor and political prisoners, said Burma was living "through a very fragile time" but that he too was not afraid.