Chaos broke out Friday at Melbourne City Square after police charged the Occupy Melbourne camp, tearing down tents and shacks outside the Town Hall.

Occupy Melbourne protesters have spread up to the intersection of Swanson and Collins streets, arms locked together in a human chain, refusing to move even as riot police stood just a metre away from them.

A huge crowd of hundreds of onlookers has gathered to watch the scene.

A man who allegedly forced his way inside the barriers around the square was dragged away by the police critical incident response team. He was arrested face down, handcuffed, and led away, onlookers told News.com.au.

Inspector Mick Beattie said they will push through with the eviction of protesters, who have been ignoring a Melbourne City Council eviction order.

"We are prepared to be very patient. These people have been quite well-behaved, from a police point of view, all week. We would hate to see it spoiled now," he said. "Some people have arrived here this morning who are clearly intent on causing problems and we have got to try and manage that as best we can."

The protesters' tents had been up since Saturday as part of the global protest that began as Occupy Wall Street in New York.

Occupy Melbourne spokesman Jacob Grech told the Herald Sun protesters had remained peaceful and they were determined to stay put.