By Julien Toyer and Sam Edwards
MADRID/BARCELONA (Reuters) - Catalonia's leaders said on Saturday they would not accept direct rule imposed on the region by the Spanish government, as a political crisis that has rattled the economy and raised fears of prolonged unrest showed no signs of easing.
Spanish Prime Minister Mariano Rajoy announced earlier on Saturday he would invoke special constitutional powers to fire the regional government and force a new election to counter the region's move towards independence.
Catalan President Carles Puigdemont, who made a symbolic declaration of independence on Oct. 10 after a referendum to secede, called Rajoy's moves the "worst attacks against the people of Catalonia" since Spain's military dictatorship.
It is the first time since Spain's return to democracy that the central government has used its powers to seize control of a regional administration.
Rajoy said it was necessary to end a crisis that has fractured the country and prompted Spain to reduce growth forecasts for the euro zone's fourth-largest economy.
After taking party in peaceful demonstration, Puigdemont expressed his rejection of Madrid's move, but stopped short of saying he would make good his threat to push ahead with the independence bid before direct rule takes effect.
"I ask the (Catalan) parliament to meet in a plenary session during which we, the representatives of the citizens' sovereignty, will be able to decide over this attempt to liquidate our government and our democracy, and act in consequence," Puigdemont said in a televised address.
Rajoy, who acted with backing from the main opposition party in Madrid and King Felipe, needs the authorization of Spain's upper house of parliament to impose direct rule.
"Our objective is to restore the law and a normal cohabitation among citizens, which has deteriorated a lot, continue with the economic recovery, which is under threat today in Catalonia, and celebrate elections in a situation of normality," he said.
The Senate vote that would give Madrid full control of Catalonia's finances, police and public media and curb the powers of the regional parliament for up to six months is scheduled for next Friday.
That could give the independence movement room to maneuver.
The regional parliament's speaker, Carme Forcadell, said she would not accept Madrid's move and accused Rajoy of a "coup."
"Prime Minister Rajoy wants the parliament of Catalonia to stop being a democratic parliament, and we will not allow this to happen," Forcadell said in a televised speech.
The assembly is expected to decide on Monday whether to hold a session to formally proclaim the republic of Catalonia.
Catalan media have said Puigdemont could dissolve the regional parliament and call elections by next Friday. Under Catalan law, those elections would take place within two months.
That would enable Puigdemont to go the polls earlier than envisaged by Rajoy, who spoke of a six-month timetable, and to exploit the anti-Madrid sentiment running high in the region.
Pro-independence groups have previously mustered more than 1 million people onto the streets in protest at Madrid's refusal to negotiate a solution.
"LET'S PROCLAIM THE REPUBLIC"
Puigdemont and his cabinet colleagues joined a demonstration in Barcelona, wearing yellow ribbons in support of two senior independence campaigners who have been jailed on charges of sedition.
"Freedom! Freedom!" tens of thousands of protesters chanted as they waived independence flags and signs reading "Defending our land is not a crime," and "Let's proclaim the republic."
"(Rajoy) triggering this article will not resolve anything," said 38-year-old builder Abel Fernandez, attending the demonstration with a pro-independence flag tied around his neck.
"They won't be able to keep quiet the half of Catalonia that is in favor of independence and those who favor the right to decide."
Catalan authorities said about 90 percent of those who took part in the referendum on Oct. 1 voted for independence. But only 43 percent of the electorate participated, with most opponents of secession staying at home.
The independence push has met with strong opposition across the rest of Spain and divided Catalonia itself. It has also prompted hundreds of firms to move their headquarters out of the region. Rajoy on Saturday urged them to stay.
His center-right People's Party (PP) government has insisted that Puigdemont has broken the law several times in pushing for independence. It received unequivocal backing from the opposition Socialist Party.
"Differences with the PP on our territorial unity? None!" said Socialist leader Pedro Sanchez.
Heavy-handed police tactics to shut down the referendum were condemned by human rights groups, and secessionists accused Madrid of taking "political prisoners".
(Additional reporting by Isla Binnie, Carlos Ruano and Tomas Cobos in Madrid; Editing by Angus MacSwan and Robin Pomeroy)