The rare scenes in which crowds faced down riot police in the international financial hub forced protest leaders to warn supporters to "retreat and save their lives" if rubber bullets were fired on Sunday.
Protesters screamed "Shame!" at officers, many in gas masks and riot gear, as they tried to shield themselves from the clouds of tear gas which was last used in Hong Kong in 2005.
It marked a dramatic escalation of protests in the city, which rarely sees such violence, after a tense week of largely contained student-led demonstrations exploded into mass angry street protests.
Protesters have defiantly stuck to their demands for full universal suffrage after Beijing last month said it would allow elections for the city's next leader in 2017 but will vet the candidates a decision branded a "fake democracy".
According to the sources around ten thousand protesters were dug in for another night as the unrest spilled over into other areas beyond the main site for the first time with thousands launching a sit-in across the harbour.
Protest leaders on Sunday called on demonstrators to pull back if police used rubber bullets, with rifles slung over the shoulders of many officers, or if they felt their lives were threatened.
"This is a matter of life or death. If their lives are threatened they should retreat and save their lives," said professor Chan Kin-man, a co-founder of the Occupy Central group which threw its weight behind the protest on Sunday.
As acrid plumes of smoke wafted across the city, demonstrators expressed outrage at the city's police but remained defiant.
"We are unarmed, just standing here, there was no warning for the gas," Harry Hung told after a volley was fired.
"This is unbelievable. This is a peaceful protest and the police are the ones using violence," added demonstrator Jade Wong. "The level of police violence here is just like mainland China, it was never like this before."
The tear gas did little to stem the tide of demonstrators occupying more than 800 metres of a vital multi-lane highway usually filled with vehicles.