The march, staged by the Trades Union Congress, proceeded for hours from Victoria Embankment past the Houses of Parliament to Hyde Park, where Labor Party leader Ed Miliband addressed the crowd, the BBC reported.
Sky News and the Daily Mail said the march drew 500,000 people. One union, Unite, said so many members wanted to attend it could not find them enough transport to London.
TUC General Secretary Brendan Barber told the rally, "We are here to send a message to the government that we are strong and united. We will fight the savage cuts and we will not let them destroy peoples' services, jobs and lives."
Miliband said: "The Tories said I should not come and speak today. But I am proud to stand with you. There is an alternative."
Several groups of black-clad, masked marchers split off and scuffled with police, vandalizing banks, storefronts and hotels, including the Ritz. Police arrested 200 people, Sky News said.
Education Secretary Michael Gove said earlier the government was "inheriting a terrible economic mess [and] we have to take steps to bring the public finances back into balance."