(Recasts with more clashes)
By Clare Baldwin and James Pomfret
HONG KONG, Oct 17 (Reuters) - Hong Kong riot police used pepper spray and baton charged crowds of pro-democracy protesters on Friday evening as tension escalated after a pre-dawn clearance of a major protest zone in the Chinese-controlled financial hub.
Crowds of protesters headed to the gritty and congested Mong Kok district after work and school on Friday evening, across the harbour from the heart of the civil disobedience movement near government headquarters, to try to reclaim sections of an intersection that police had cleared in a surprise raid early on Friday.
Hundreds of protesters tried to break through police lines and they used open umbrellas to shield themselves from pepper spray. In the melee, police used batons and scuffled violently with activists.
Police hauled off several protesters as others shouted insults and chanted "open the road".
The protesters, led by a restive generation of students, have been demanding China's Communist Party rulers live up to constitutional promises to grant full democracy to the former British colony which returned to Chinese rule in 1997.
Before dawn on Friday, hundreds of police staged their biggest raid yet on a pro-democracy protest camp, charging down student-led activists who had held the intersection in one of their main protest zones for more than three weeks.
The operation came while many protesters were asleep in dozens of tents or beneath giant, blue-striped tarpaulin sheets.
The raid was a gamble for the 28,000-strong police force who have come under criticism for aggressive clearance operations with tear gas and baton charges and for the beating of a handcuffed protester on Wednesday.
Storming into the intersection with helmets, riot shields and batons at the ready from four directions, the 800 officers caught the protesters by surprise. Many retreated without resisting.
"The Hong Kong government's despicable clearance here will cause another wave of citizen protests," radio talk-show host and activist Wong Yeung-tat said earlier.
In the evening, with more protesters streaming to the area, authorities closed the nearby underground train station, media reported.
Police raised red flags, warning the protesters not to charge.
The escalation in the confrontation illustrates the dilemma faced by police in striking a balance between law enforcement and not inciting the defiant protesters who have been out for three weeks in three core shopping and government districts.
In August, Beijing offered Hong Kong people the chance to vote for their own leader in 2017, but said only two to three candidates could run after getting backing from a 1,200-person "nominating committee" stacked with Beijing loyalists.
The protesters decry this as "fake" Chinese-style democracy and demand Beijing allow open nominations.
Earlier this week, police had used sledge-hammers and chainsaws to tear down concrete, metal and bamboo barricades to reopen a major road feeding the Central business district.
Despite the clearances, about 1,000 protesters remained camped on Hong Kong Island in a sea of tents and umbrellas on an eight-lane highway beneath skyscrapers.
Hong Kong's pro-Beijing leader Leung Chun-ying has said there is "zero chance" Beijing will give in to protesters' demands, a view shared by many observers and Hong Kong citizens. He has also refused to step down.
Leung has proposed talks next week with student leaders.
The Hong Kong Association of Banks called on Friday for an end to help Hong Kong preserve its competitiveness and maintain investor confidence.
At the peak of the protests, 100,000 had been on the streets, presenting Beijing with one of its biggest political challenges since it crushed pro-democracy demonstrations in and around Tiananmen Square in the Chinese capital in 1989.
Those numbers have dwindled significantly.
China rules Hong Kong under a "one country, two systems" formula that gives the city wide-ranging autonomy and freedoms not enjoyed in mainland China, with "universal suffrage" stated as the eventual aim.
It is concerned calls for democracy in Hong Kong, and in the neighbouring former Portuguese colony of Macau, could spread to the mainland, threatening the party's grip on power.
Additional reporting by Bobby Yip, Jon Gordon; Writing by Anne Marie Roantree, Farah Master; Edting by Robert Birsel