'Occupy' protesters have been camped outside St. Paul's Cathedral since last October [EPA]

Police in London say they arrested 20 people in an operation to dismantle an 'Occupy' protest camp outside the city's St Paul's Cathedral.

Police and bailiffs carried out the evictions in the early hours on Tuesday after the protesters were last week refused permission to appeal against a High Court decision to allow their eviction to proceed.

The Court of Appeal's decision meant the City of London Corporation was free to clear the site.

The corporation said in a statement: "We regret that it has come to this but the High Court Judgment speaks for itself and the Court of Appeal has confirmed that judgment."

Police told the Reuters news agency that the bailiffs moved in just after midnight to remove tents and equipment and police were standing by.

Protesters had already removed about 100 tents themselves since losing the court order.

As the eviction began, some protesters attempted to wear their tents as clothing and others used wooden pallets to form barricades.

On their Twitter page, the Occupy London Stock Exchange tweeted: "Police arrive at St Paul's. look to be kettling (barricading) the tents."

The corporation urged the activists, who were inspired by the US Occupy Wall Street protest, to "move on peacefully".

The protesters said they were exercising freedom of speech and drawing attention to an unfair capitalist system that spawned a global financial crisis.

Local authorities claim the camp has harmed nearby businesses, caused waste and hygiene problems and attracted crime and disorder.

Last week, the High Court rejected the protesters' challenge to the eviction order, ruling that the right to protest did not justify a semi-permanent camp on a public pathway.

The protesters had been camped outside the 300-year-old church since October, but some said they anticipated that the demonstration would soon resume.

"It's only tents and materials the injunction applies to so I think some protesters will be back here tomorrow," said Gary Sherborne, 50.