John McIntyre reports: "Eye witnesses blamed masked demonstrators for the violence"

Magistrates bailed four of the men and remanded in custody the other two. All will have to reappear before a court at a later date.

Police believe the protests, which left a trail of damage across the Square Mile, was planned, and said some demonstrators were from groups with a track record of "extreme violence".

But protesters said "heavy-handed" policing and the behaviour of a minority of activists had led to the clashes in which 46 people were injured.

Protestor Mark Lynas: The police were overzealous in their handling of the event

There were 16 arrests and clean-up operations took all night. The demonstration continued in Trafalgar Square until Saturday morning.

The riots began during the Carnival against Capitalism demonstration, organised by the June 18 (J18) umbrella group to coincide with the opening of the G8 world economic summit in Cologne.

'Extremely offensive'

Chief Inspector Ed Bateman of the Metropolitan Police said his officers had "been through something horrific".

The City of London: "A war zone"

"I certainly haven't seen gas used before. I think it was possibly mustard gas, or some form of gas, that got into my officers' eyes and they couldn't work," he said. "And when that happened people would throw things at them."

Three policemen are still being treated in hospital for leg injuries. One female protester is also receiving treatment after being run over by a reversing police van. She suffered concussion and a fractured leg, but is said to be in a "satisfactory" condition.

Protester Mark Lynas said: "Police in full riot gear and looking extremely offensive charged towards the demonstrators and started attacking them."

'Wanton terrorism'

Some activists said they would be back at the same time next month to stage another demonstration against capitalism.

Protesters could be back next month

But the Lord Mayor of London, Lord Levene, who witnessed the disturbances, branded the protesters' actions "wanton terrorism" and described the scene as a "war zone".

Offices, hospitals and restaurants in the Square Mile were damaged as some of the thousands of protesters rampaged through the area, attacking police and buildings with bricks, breeze blocks and scaffolding poles.

Lord Levene: This was "no way to save the world"

The demonstration started peacefully with around 500 people, but quickly degenerated into violence. Banks were targeted and a McDonalds hamburger restaurant took the brunt of a concerted attack.

Protesters also attempted to force their way onto the trading floor of the London International Financial Futures Exchange (Liffe). The building's glass doors were smashed.

'Money kills'

Liffe traders went onto their fire escape and threw trading cards onto the protesters in an act of defiance. Trading was halted as the building was evacuated.

Thousands crammed into the Square Mile to take part in the demonstration

Earlier around 300 cyclists had disrupted traffic in London's financial district.

Carrying banners with slogans like "Money Kills", they rode slowly into the city centre and brought traffic around the Bank of England in Threadneedle Street to a standstill. Two activists were removed from Tower Bridge after they tried to climb the structure. Campaigners also daubed pink paint on the door of the London Metal Exchange.

Des Kay, of the Save the World Club, said: "As Gandhi said 'There's enough on this planet for everyone's needs, but not for everyone's greed'. That is what today is all about."

The London rally had been timed to coincide with other rallies around the world.

German police were expecting up to 100,000 demonstrators to call for the burden of debt in the world's poorest countries to be cancelled at the start of the G8 summit of industrialised nations in Cologne.

Simultaneous, but lower key protests were also held in Israel, Belarus and New York.