Activists claim that the plans force unemployed job seekers to work without pay or risk losing their benefits.

Students, campaign groups and local people, numbering around 30 in total, were all involved in the demonstration, which was peaceful and monitored by police throughout.

People on the High Street joined the demonstrators as they moved between businesses, with passers encouraged to sign a Socialist Workers Party petition declaring “we won’t work for free”.

But the march was received negatively by some market stall owners, who chanted “get a job” as it went by.

One passer by, Brenda Reed, 50, who is unemployed and from Southwark, said: “I think the scheme is terrible, it’s ridiculous. Cameron and Nick [Clegg] should go and do the same thing that they’re telling people to do and see what it’s like. It’s all right for them, they’re the money people.

“Good on the protestors to come out here and express how they’re feeling and let everyone know the real truth and what’s behind it.”

Demonstrations also took place in Hackney and on Oxford Street, where protesters reportedly clashed with police. Mark Dunk, an unemployed activist, said: “Today’s demonstration shows that the slave labour schemes can be beaten…we will keep protesting until these firms pay their staff and workfare is scrapped.”

The Department for Work and Pensions removed benefit sanctions from its Work Experience scheme on Wednesday after major employers threatened to back out amidst ongoing controversy.

Employment minister Chris Grayling released a statement listing companies that remain on the programme and insisted it would remain “totally voluntary”.

But Johnny Morris, 25, a protestor with the Solidarity Federation and teacher from Deptford, pointed to other schemes like the government’s Mandatory Work Activity, under which claimants failing to attend a six to eight week unpaid placement can have their benefits withdrawn for 13 weeks.

Morris said: “There has been a lot of talk about concessions being made on one scheme but we have four more schemes that need to be defeated that essentially offer young people for unpaid labour.

“I think we are part of a growing movement that’s gathering momentum and the government and big businesses are very scared. That’s why you can see companies dropping out one by one.”

Allegations have also been made that Jobcentres do not always tell claimants the schemes are voluntary, and give the impression they are not.

8,100 people were referred to Mandatory Work Activity in November last year, according to a Guardian fact sheet – 1,500 more than went on the voluntary Work Experience plan.

Despite the larger central London protest on Oxford Street, Lewisham activists stressed the importance of localised demonstrations.

James Stanning, 33, a surveyor from New Cross, said: “A lot of people passing by today will be unemployed and affected by these free labour schemes and it’s a shame if we don’t get to talk to them.

“People who aren’t really engaged in politics are slightly baffled when it comes to protests like this and often don’t have time to stop for a conversation. It’s really good when people can stop and they’re interested in what’s going on.”

Another Lewisham protest has been arranged for 31 March, which will again see protesters target businesses involved in the scheme in an attempt to make them withdraw.