The rally in Trafalgar Square got off to a rousing start when Stop the War’s chair, Andrew Murray, told the crowd that police had caved in and allowed the march to proceed.
He added that the climb-down was a “tribute” to the strength of the anti-war movement.
Stop the War’s president, Tony Benn, told the cheering protesters they were forming “a people’s parliament”.
The former MP had campaigned non-stop for two weeks against the ban, personally delivering letters to Downing Street, Scotland Yard and the Home Office on the Saturday night following the decision to make it illegal.
Stop the War convenor Lindsey German said the authorities and MPs had underestimated the determination of the anti-war movement.
Her message to the government was, “You will never draw a line under this war until you bring all our troops home. And we don’t want the troops brought home just so they can be sent to Afghanistan or the Iranian border.
“We want a permanent break with George Bush’s murderous, imperialistic policies.”
Labour MP for Liverpool West Derby Bob Wareing who has been de-selected by New Labour, said the same MPs who supported the attempted ban were those who had voted for the war and that they had “blood on their hands”.
Respect MP George Galloway agreed that the peace movement had won a “significant victory”.
He added, “Gordon Brown might think that Basra is a photo opportunity, but we know it is a graveyard for millions of innocent Iraqi civilians, whose lives are being ruined by the criminal activity of the British parliament.”
In a moving speech at the end of the demonstration – addressing the protesters from College Green outside parliament – Benn said that in every generation two flames burned – one, a flame of anger against injustice, the other of hope for a better world.