The noisy protest in Leicester Square on Monday was a demonstration against the London Local Authorities Bill due to be introduced next year.
It will allow councils to license buskers and direct them to perform in designated areas.
Westminster Council says it will benefit both buskers and the public and is necessary to keep London's crowded streets clear.
Currently the only licensing scheme is in Covent Garden, central London, where performers are vetted by the Covent Garden Market Association.
But the protesters were also complaining about the confiscation of their instruments by Westminster Council.
Bongo Mike, who spoke against the London Local Authorities Bill in Parliament, told BBC London: "They want to turn it into a clean little continental place with café terraces and things like that.
"That's why we have got pots and pans, because if they seize them, they are virtually worthless."
A Westminster Council spokeswoman said they only confiscated instruments if buskers failed to respond to requests to keep the noise down.
She said: "We don't have the boulevards of Paris, we have the streets of London.
"We have noise complaints and issues of obstruction and we have to act upon them.
She added: "We recognise that buskers add something to an area. A scheme for licensing buskers would clear things up for everybody."