Spain says it welcomes the participation of the fired Catalan leader Carles Puigdemont in new elections in the region.

Key points: Catalan declared independence after a disputed referendum

Catalan declared independence after a disputed referendum Madrid has triggered Article 155, which allows Spain's central authorities to take political control of the region

Madrid has triggered Article 155, which allows Spain's central authorities to take political control of the region A regional election will now be held in December

Mr Puigdemont has called for a "democratic opposition" to Spain's formal takeover in a veiled refusal to accept his Cabinet's dismissal in the wake of Catalonia's declaration of independence.

Madrid took formal direct control of Catalonia on Saturday, dismissing the region's defiant separatist government, including Mr Puigdemont, a day after the prosperous north-eastern region passed the independence declaration.

The move came after one of the most tumultuous days in the country's recent history, as the national parliament in Madrid approved unprecedented constitutional measures to halt the secessionist drive by the regional parliament in Barcelona.

Spanish Prime Minister Mariano Rajoy, who now replaces Mr Puigdemont as the top decision-maker in the region, also dissolved the regional parliament and called a new regional election to be held on December 21.

Catalan President Carles Puigdemont (C) was a key figure in the divisive indpendence push. ( AP: Manu Fernandez (file) )

Election 'right thing to do'

European Parliament president Antonio Tajani says Spain's decision to call the new election "was the right thing to do".

Mr Tajani spoke on Saturday while leaving the Vatican after a forum on Europe's future, telling reporters Europe's position was clear.

"No one will ever recognise Catalonia as an independent country. The referendum was illegal … the state of law should be restored," he said.

He said the election would allow Catalans to "decide what kind of government they want to have".

"All should happen according to the Spanish Constitution," he said.

Mr Tajani said that Europe hoped dialogue could help resolve the "difficult situation," adding "this does not mean that European Union could mediate, because it is a Spanish internal issue".

Sorry, this video has expired The moment Catalonia declared independence from Spain. (Photo: AP)

Puigdemont vows to 'keep working'

However, Mr Puigdemont said only the regional parliament could elect or dismiss the Catalan government.

In a pre-recorded televised statement on Saturday, he vowed to "continue working to build a free country".

"The best way we have to defend the achievements to date is the democratic opposition to the application of Article 155," Mr Puigdemont said, in reference to the constitutional clause that gave Madrid direct control of affairs in Catalonia.

Some political commentators saw his mention of "democratic opposition" as laying the groundwork for political campaigning for the regional election in less than two months.

"Our will is to continue working to fulfil the democratic mandates and at the same time seek the maximum stability and tranquillity," Mr Puigdemont said.

After Spain's central authorities made the takeover official, Mr Puigdemont and the 12 members of the Catalan cabinet now will no longer be paid.

Spain's Government has said they could be charged with usurping others' functions if they refuse to obey, which could throw the region into further turmoil by prolonging a month-long standoff.

It is not clear at all whether a new election would solve Spain's problems with separatists in Catalonia.

Polls suggest pro-independence parties would likely maintain their slim advantage in parliamentary seats but wouldn't get more than 50 per cent of the vote.

Mr Rajoy said the declaration of independence "not only goes against the law but is a criminal act".

His comments were met with jeers and whistles of disapproval in Barcelona, the main city in Catalonia, where thousands had gathered on Friday to toast the independence declaration.

It is unclear how Mr Rajoy will be able to exert control at lower levels of the vast regional administration.

Some among the roughly 200,000 civil servants had said they will refuse to obey orders from Madrid, risking being punished or even fired under the special powers granted to central authorities by the nation's Senate.

Catalonia's regional police chief sacked

In one of the first moves, Spain's Interior Ministry published an order to demote Josep Lluis Trapero from his position as head of the regional Mossos d'Esquadra police.

He will be allowed to remain as commissar.

Catalonia's regional police chief Josep Lluis Trapero was sacked by Spain. ( AP: Paul White )

Mr Trapero became a hero to the secessionists after his force took a much softer stance than national police in enforcing a government ban on an independence referendum on October 1.

The force is riven by distrust between those for and against independence and is estranged from Spain's national police forces.

"Given that there is likely to be an increase in gatherings and rallies of citizens in all the territory and that there are people of different thoughts, we must remember that it is our responsibility to guarantee the security of all and help these to take place without incident," the order said.

Mr Trapero's dismissal was signed off by Spanish Interior Minister Juan Ignacio Zoido.

Spain's High Court last week banned Mr Trapero from leaving Spain and seized his passport as part of an investigation for alleged sedition, although it did not order his arrest.

Prosecutors say he failed to give orders to rescue national police trapped inside a Barcelona building during pro-independence protests last month.

Catalonia's regional police agency issued a statement saying it was operating as normal, and "protecting and guaranteeing the safety of people is our priority".

Opponents of independence for Catalonia meanwhile held a rally in Madrid.

Thousands of people turned out in the Plaza de Colon, many waving Spanish flags or wearing them around their shoulders.

Pro-unity demonstrators gather in Madrid. ( Reuters: Susana Vera )

AP