Spain's "indignant" protesters refused to completely dismantle a tent encampment in a major Barcelona square Wednesday despite saying they feared a clash with police.

Activists had agreed to clear their tent camp from the Plaza de Catalunya on Wednesday in return for the city giving them an information booth to help tell people about the protest over Spain's economic crisis.

But Roc Peris, a spokesman for the Barcelona movement, said the city had offered them a cabin measuring eight square metres (86 square feet), which was "not enough".

"We don't think that's fair. We did our part to clean up as much as possible and now we are waiting for their proposal," he said, adding that he feared police may swoop overnight to move them out.

Protesters removed some signs and cleared about one-third of the encampment in the square but left a dozen large protest stalls and about 15 smaller sleeping tents.

The Barcelona encampment was set up as part of a movement that erupted May 15 with activists rallying protesters to city squares around Spain, spreading the word via Twitter and Facebook.

The protesters have won broad public support in their fight against austerity measures, a 21.29-percent unemployment rate and corruption-tainted politicians.

On May 27, Catalan anti-riot police fired rubber bullets and swung truncheons to disperse protesters in the Barcelona square, resulting in 87 mostly light injuries.

By that same evening, however, at least 5,000 people were back in the square pitching tents again.

"If anyone is going to do any hitting it will be the police making a violent eviction," said Mehdi Semenas, 23-year-old musician and Barcelona resident from Montpellier, France.

"We are fighting for the children who will have to confront the future," he said.

A protest camp in Madrid's Puerta del Sol square was dismantled on June 12 but the group has since mounted a series of protests, rallying an estimated 200,000 people across Spain on June 19.

Last week, small groups of activists set off on long marches from Barcelona, Valencia in the east and Cadiz in the south to spread their protest before joining up for a Madrid rally planned on July 24.

Prime Minister Jose Luis Rodriguez Zapatero vowed in a state of the nation address Tuesday to curb Spain's debt and battle the crisis, describing the high unemployment rate as "unacceptable".

On Wednesday, about 100 activists gathered in Madrid's Puerta del Sol for a "people's debate" on the state of the nation, sitting on cardboard boxes as volunteers handed out umbrellas to fend off the sun and sprayed people with cooling water.

"We want to denounce the breach that separates citizens from political representatives," one activist told the crowd. "Because the problems of the citizens find no echo in the debate in parliament."