By James Pomfret
HONG KONG, June 30 (Reuters) - Hong Kong is bracing for its largest protest in more than a decade after nearly 800,000 voted for full democracy in an unofficial referendum, a move likely to stoke anti-China sentiment in the former British colony.
The annual July 1 rally, marking the day the territory returned to China in 1997, will focus on pressuring Beijing's Communist Party leaders for full electoral freedom, organizers said, and could draw the largest turnout since 2003, when half a million people demonstrated against proposed anti-subversion laws which were later scrapped.
Several groups have indicated they will stage overnight vigils after the march in a possible prelude to a planned campaign to shut down the city's financial district.
"We can see that Beijing is eroding the autonomy of Hong Kong, and we want to show we don't fear central government oppression," said Johnson Yeung, convenor of the Civil Human Rights Front, one of the organizers of the march.
Some 792,000 people, more than ten percent of the city's seven million population, voted in the referendum urging Beijing to allow opposition democrats to run in a 2017 citywide election for a new leader.
The vote was organized by Occupy Central, behind the financial district shut-down plan, and comes at a time when many Hong Kong residents fear civil liberties are being stripped away.
Beijing has allowed Hong Kong to go ahead with a popular vote in 2017, the most far-reaching experiment in democracy in China since the Communist takeover in 1949, but senior Chinese officials have ruled out allowing the public to nominate candidates.
Instead, Beijing says a small committee of largely pro-Beijing loyalists choose who gets on the ballot, effectively filtering out opposition candidates and consolidating the current standoff.
Hong Kong returned to China with wide-ranging autonomy under the formula of "one country, two systems", allowing such protests to take place. But China bristles at open dissent.
The stakes have grown markedly for Hong Kong and Chinese authorities over the past few weeks.
What was once dismissed as a fringe pro-democracy campaign by radicals has now snowballed into a populist movement with real clout and legitimacy.
SEEING RED OVER WHITE PAPER
Organizers of the Tuesday march expect more than half a million people to spill on to the streets, partly as a retort to a controversial "white paper" from China's cabinet in early June - an official government paper stressing Beijing's complete control over Hong Kong.
Two groups, Scholarism and the Hong Kong Federation of Students, say they will stage a sit-in after the July 1 march lasting until the following morning.
Alex Chow, one of the leaders of the federation, said he expected thousands to take part, with some analysts warning there was a risk this could become a catalyst for blockading the city's central business district.
In the referendum, 91 percent of voters said they wanted public nomination of candidates, while nine percent abstained. Some 88 percent said the city's Legislative Council should veto any proposal that wasn't in line with international standards.
Benny Tai, a leader of Occupy Central, urged voters to come out and march, but ruled out taking action to blockade the central business district on that day, saying it "wouldn't be the right moment". A decision would be taken later, depending on the government response.
While Chinese and Hong Kong officials have warned Occupy Central would damage the city's standing as a financial center, there appears to be a softening stance given the risks of provoking a greater backlash.
"They've changed their tone," said Joseph Wong, a former senior government official and political commentator.
"They're concerned about the high turnout and they don't want to be seen to be adding fuel to the fire," he added, noting recent comments from Hong Kong's number two official, Carrie Lam, who said the government would heed the poll's findings.
Activists say it is a peaceful movement demanding a "genuine choice" for Hong Kong voters.
Barrister Martin Lee, one of the founders of the main opposition Democratic Party, said a large turnout of marchers was key to putting pressure on Beijing.
But some Hong Kong politicians do not see much room for compromise.
"China has always been like that ... if you are tough, I'll try to be tougher," said Rita Fan, a senior Hong Kong delegate to China's parliament, the National People's Congress.
"If you are reasonable, I'll try to be more reasonable. If you go ahead with all these things, then you can expect a rather strong response." (Additional reporting by Adam Rose, James Zhang and Emily Chung; Editing by Nick Macfie)