Activists rallied Wednesday in Hong Kong as lawmakers prepared to start a highly anticipated debate over a copyright bill, which has been criticised by opponents as curbing freedom of speech.

Around 300 people, including students and protesters from the creative industries, gathered outside the Legislative Council complex carrying banners that read "Fight for the freedom of the next generation".

The debate was due to start Wednesday evening or Thursday and could last for days before a vote.

Fears are growing over the erosion of freedoms in the semi-autonomous Chinese city, with concerns that Beijing's influence is increasing.

The city remains deeply divided after mass pro-democracy rallies last year failed to force Beijing to scrap its restrictions on political reforms.

The government says the bill -- already shelved in 2012 after opposition -- is necessary to help fight online piracy.

But critics slam it as "Internet Article 23" referring to an anti-subversion bill dramatically dropped in 2003 after half a million protesters took to the streets.

"It hinders Hong Kong people's freedom of speech," university student Glacier Kwong, 19, of protest organisers Keyboard Frontline which campaigns for Internet freedom, told AFP.

"The government... will make use of the updated law to politically prosecute those who disobey," she added.

Political satire using a pastiche of song lyrics and movie scenes has long been common on the city's Internet forums and social networking websites.

Opponents fear the bill will set the stage for harsher government censorship online, although exemptions for parody, satire and commentary have been introduced since the original bill was shelved.

Protester Tinki Lo, a middle school student in uniform, said: "The thing about this bill is that you don't know when you've broken the law and when you're within your rights."

Hong Kong was handed back to China by Britain in 1997 under a "one country, two systems" deal that guaranteed the retention of its civil liberties and capitalist lifestyle for 50 years.

But attacks on journalists, court cases against democracy activists and government interventions in education have heightened concerns that cherished freedoms are being lost.