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The BBC's Sanjoy Majumder says thousands have gathered outside Tihar jail
Indian Prime Minister Manmohan Singh has told parliament that the hunger strike by anti-corruption activist Anna Hazare is "totally misconceived".
He said the 74-year-old was trying to circumvent democracy by demanding the overhaul of an anti-corruption bill.Mr Hazare spent the night inside Tihar jail in Delhi after rejecting an offer by the authorities to release him.
He has said he will remain there unless he can resume the public protest stopped by his arrest on Tuesday.
Protests backing his campaign have been gathering momentum across the country.
Thousands of people have gathered outside Tihar jail, many carrying the Indian flag and shouting "Down with corruption" and "Hail Mother India".
There were also reports of large demonstrations at India Gate in Delhi, in Mumbai, Chandigarh, Hyderabad, Bangalore, Ahmedabad, Amritsar, Bhubaneshwar and in the north-eastern state of Assam.
Supreme Court lawyers have announced they will march to show their support for Mr Hazare, while auto-rickshaw drivers have gone on strike.
'Grave consequences' Mr Hazare and at least 1,200 of his supporters were arrested at JP Park in the capital on Tuesday morning, hours before he was due to begin his "fast unto death".
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Outside Tihar jail's high walls, the narrow lanes are choked with Anna Hazare's supporters, who are determined to persuade the authorities to release him. Hundreds of them have taken up every available space, chanting, singing and waving giant Indian flags. Many spent the night there, holding a vigil in solidarity with the 74 year old, who apparently refused all food and camped in the governor's office.
"Anna carry on with your struggle, we are with you," the crowds chanted. Within minutes, one section broke into an Indian rendition of the American civil rights song, We Shall Overcome. Passions are high, especially with conflicting reports that Mr Hazare may be released soon. Cheers ring out every time someone comes out through the prison gates.
At the scene
"Anna carry on with your struggle, we are with you," the crowds chanted. Within minutes, one section broke into an Indian rendition of the American civil rights song, We Shall Overcome. Passions are high, especially with conflicting reports that Mr Hazare may be released soon. Cheers ring out every time someone comes out through the prison gates.
The Congress-led government denied it was stifling a democratic protest, saying the protesters had been detained because they had not accepted the police's restrictions on the number of fasting days and participants.
As public anger mounted, officials ordered Mr Hazare's release. But he refused to leave jail before the police dropped the conditions they set for his freedom.However, there is no sign yet that the government is prepared to allow that to happen, says the BBC's Mark Dummett in Delhi.
Speaking in parliament, Mr Singh argued that the arrests had been justified and that Mr Hazare's campaign amounted to a challenge to the authority of the government, which he was duty bound to protect.
"I acknowledge that Anna Hazare may be inspired by high ideals," he said. "However, the path that he has chosen to impose a draft of the bill on parliament is totally misconceived and fraught with grave consequences for our parliamentary democracy.
"Those who believe that their voice and their voice alone represents the will of 1.2 billion people should reflect deeply on that position.
"They must allow the elected representatives of the people in parliament to do the job that they were elected for.
Mr Hazare says the proposed anti-corruption ombudsman should be able to investigate any official The prime minister's speech was constantly interrupted by opposition MPs, many of whom jeered and shouted "shame".
Arun Jaitley, a leader of the opposition Bharatiya Janata Party, said: "It is a wake-up call for all of us unless we put our house in order. The people of this country are becoming restless."
Our correspondent says a prolonged stand-off between the two sides looks possible, with demonstrations being held in Delhi and other cities, and the government's options looking limited.
'Fundamental right' Mr Hazare is reported to have spent Tuesday night at one of the rooms in the administrative block of Tihar jail.
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Dispute over Citizens' Ombudsman bill
- Following a hunger strike by Anna Hazare in April, the government agreed to draft the Jan Lokpal (Citizens' Ombudsman) bill. The final bill incorporates 34 of the 40 principles set out by Mr Hazare, but he and other activists have rejected it
- Mr Hazare says the ombudsman should have the power to investigate the prime minister and senior judges. The government refuses to include them, saying their authority will be eroded
- Mr Hazare wants the ombudsman to be able to investigate MPs accused of taking bribes to vote or ask questions in parliament. The government says such probes should be carried out by MPs
A member of the India Against Corruption (IAC) movement, Gaurav Bakshi, told the BBC that Mr Hazare was determined to continue to his hunger strike.
"He must be allowed to sit the fast that he was originally asking for at JP Park with no conditions attached to it," he said. "His basic fundamental reason is that his fundamental right as a citizen of the country - the freedom to fast and protest in any manner anywhere in the country peacefully - has been taken away with 22 conditions imposed. He is against that and he is continuing with the fast where he is."
Mr Bakshi said he had the support of Indians all over the world, who realised this was an "opportunity to clean up the country".
Mr Hazare has called the proposed anti-corruption legislation a "cruel joke" and has described the fight against corruption as the "second war of independence".
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Mark Dummett in Delhi says authorities seem unsure how to respond to the situation
The final version of the bill was presented in early August, but Mr Hazare and other activists rejected it because the prime minister and senior judges would be exempt from scrutiny.
India has recently been hit by a string of high-profile corruption scandals including a telecoms bribery scam that may have cost the government $39bn (£23bn), alleged financial malpractice in connection with the Delhi 2010 Commonwealth Games and allegations that homes for war widows were diverted to civil servants.
Critics of the government say the scandals point to a pervasive culture of corruption in Mr Singh's administration.
A recent survey said corruption in Asia's third largest economy had cost billions of dollars and threatened to derail growth.
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