MADRID May 13---- Thousands of Spaniards fed up with economic misery and waving banners against bankers marched on Saturday to mark the first anniversary of the grassroots "Indignados" movement that has sparked similar protests around the world.

Up to 600 people denouncing the Bank of England rallied in London and a Reuters witness said scuffles broke out between some demonstrators and police, with at least 12 arrests.

The Indignados and the offshoot Occupy and Take the Square movements had called for a global day of action against anti-debt austerity policies and the widening gap between rich and poor, but nowhere were protests as large as in Spain.

A year after tens of thousands set up a month-long camp in Madrid's central Puerta del Sol square, drawing international attention, indignant Spaniards have even more to be angry about.

Unemployment has soared to over 24 percent, over half the country's youth is out of work, the economy has dipped back into recession and one of its largest banks has been nationalised.

Prime Minister Mariano Rajoy's conservative government has passed painful austerity measures that have hit once-sacred public health and education spending in an effort to appease international markets and avoid a Greek-style bailout.

"We have to stand up and say enough is enough! They pull our hair telling us we're lazy so they can dismantle social welfare and take away health and education and now they're bailing out the bankers," said Gloria Bravo, 48, a civil servant.

Rescue money for banks, crippled after a 10-year building bubble burst four years ago, is a touchy subject for Spaniards, especially after the government took a stake in lender Bankia on Wednesday.

"They bail out banks but not people," banners read in Cantabria, northern Spain, home to Spain's biggest bank Santander .

Demonstrators gathered in more than 80 cities across Spain, chanting the slogan that has become a mantra at protests over the past year: "They say it's democracy but it's not."

In central Madrid, streets were blocked as activists convened in various neighbourhoods across the capital to march towards Puerta de Sol, which filled up with people waving flags and chanting to the beat of horns and drums.

"The situation is getting worse but the root of the problem remains the same; this is a moment of crisis for capitalism," Jesus Gonzalez, 38, an airline employee said as he made for the Puerta del Sol.