* First time protesters have targeted famous party district
* Economic data confirms Hong Kong in recession
* Britain urges restraint on all sides (Recasts with tear gas fired)
HONG KONG, Oct 31 (Reuters) - Hong Kong police fired tear gas to try to break up anti-government protests in the densely populated Kowloon district of Mong Kok on Thursday, as masked demonstrators gathered to join Halloween fancy-dress clubbers on the main island of Hong Kong.
Protesters, many dressed all in black and wearing now-banned face masks, knelt in the road and took cover behind umbrellas, angry at a violent police crackdown on unrest there two months ago. Many shone lasers at police as others built barricades in the road with rubbish bins and other debris.
The demonstrators on the main island were gathering at Victoria Park in the Causeway Bay shopping district to march to the hilly, narrow streets of the Lan Kwai Fong bar district above Central, the scene of a deadly New Year's stampede nearly 27 years ago.
Police have banned the march and said they would close roads, including the short Lan Kwai Fong street itself, from early afternoon until Friday morning to "facilitate the public celebrating." It was not immediately clear how that would work.
It is the first time protesters have targeted the party district in five months of increasingly violent, anti-government unrest. Typically, weekends and celebrations like Halloween see hordes of revellers spilling out of the bars and clubs on to the streets.
A stampede during New Year celebrations at the end of 1992, when thousands had gathered on streets slippery with beer and champagne, killed at least 20 people and wounded scores.
Police, who have been warning for days of the threat to public order and safety, were deploying 3,000 riot officers and three water cannon outside government offices near the route, according to media.
Hong Kong, as widely expected, slid into recession for the first time since the global financial crisis in the third quarter, data confirmed on Thursday, weighed down by increasingly violent anti-government protests and the protracted U.S.-China trade war.
Hong Kong's central bank also cut rates on Thursday in step with the U.S. Federal Reserve.
BRITAIN URGES RESTRAINT
Pressed on government plans to relieve the hit to businesses in Hong Kong from the protests, Hong Kong leader Carrie Lam told a conference the circumstances warranted "exceptional" measures.
"If we still act in the same conventional mode as if business is usual and life is normal, then we are not being very responsible," she said.
Her administration has pledged around HK$21 billion ($2.68 billion) of financial aid for business since August, from rent to fuel subsidies.
The protesters are angry at what they see as Beijing's increasing interference in Hong Kong, which returned from British to Chinese rule in 1997 under a "one country, two systems" formula intended to guarantee freedoms not seen on the mainland.
China denies meddling and has accused foreign governments, including the United States and Britain, of stirring up trouble.
British Foreign Secretary Dominic Raab said on Thursday Hong Kong should seek ways to de-escalate tension and find a political resolution, calling on both protesters and authorities to show restraint.
China said after a meeting of its top leadership that it would safeguard Hong Kong's prosperity and protect national security in the face of unrest there.
Some protesters in Hong Kong have thrown petrol bombs at police, lit fires and trashed government buildings and businesses, especially those seen as pro-Beijing, during recent demonstrations.
Police have responded with tear gas, pepper spray, rubber bullets, water cannon and several live rounds.
Hong Kong's subway operator MTR Corp, which has also been targeted by protesters, said it would shut some stations earlier than usual. Central station, a few minutes walk downhill from Lan Kwai Fong, will shut by 9 p.m. (1300 GMT).
(Reporting by John Geddie, Twinnie Siu, Jessie Pang, Farah Master and Tom Westbrook in Hong Kong, Guy Faulconbridge and Andrew MacAskill in London and Ben Blanchard in Beijing; Writing by Nick Macfie; Editing by Raju Gopalakrishnan)
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