A small group, mostly students wearing hard hats and masks, used a metal trolley, poles and pieces of scaffolding to hack through reinforced glass and charge at the government compound near the heart of the financial centre.

Riot police in helmets and carrying batons fired pepper spray in response in a stand-off that was lasting into the sweltering heat of the evening.

Hong Kong leader Carrie Lam suspended the bill on June 15 after some of the largest and most violent protests in decades, but stopped short of protesters' demands to scrap it.

The Beijing-backed leader is now clinging on to her job at a time of an unprecedented backlash against the government and a series of mass protests that pose the greatest popular challenge to Chinese leader Xi Jinping since he came to power in 2012.

Opponents of the bill, which would allow people to be sent to mainland China for trial in courts controlled by the Communist Party, fear it is a threat to Hong Kong's much-cherished rule of law and are demanding it be scrapped and Lam step down.

Hong Kong returned to China under a "one country, two systems" formula that allows freedoms not enjoyed in mainland China, including freedom to protest and an independent judiciary.

Tens of thousands marched in temperatures of around 33 degrees Celsius from Victoria Park on Monday in an annual rally that organisers hoped would get a boost from the anger over the extradition bill.

Tension was high as police earlier raced towards protesters, beating some with batons as they fell to the ground, and used pepper spray to try to disperse crowds gathered near where officials were preparing a flag-raising ceremony to mark the handover.

The protesters, some with cling film wrapped around their arms to protect their skin in the event of tear gas, once again paralysed parts of the Asian financial hub as they occupied roads after blocking them off with metal barriers.

A tired-looking Lam appeared in public for the first time in nearly two weeks.

"The incident that happened in recent months has led to controversies and disputes between the public and the government," she said. "This has made me fully realise that I, as a politician, have to remind myself all the time of the need to grasp public sentiment accurately."

The extradition bill has sent jitters across all sectors of Hong Kong in an unprecedented backlash against the government.

Beyond the public outcry, the extradition bill has spooked some of Hong Kong's tycoons into starting to move their personal wealth offshore, according to financial advisers, bankers and lawyers familiar with the details.

Australian Associated Press