Police used tear gas and water cannon here Thursday to break up an unauthorized march by workers demanding an increase in Chile's monthly minimum wage from the equivalent of $364 to $500.

Some 500 members of the CUT, the country's largest labor federation, gathered in Santiago's Heroes Square and set out for the presidential palace.

The marchers advanced less than a block before they were confronted by police in full riot gear, including some on horseback, who blocked the protesters' path before deploying tear gas and water cannon to disperse the crowd.

The administration of the capital region had denied the CUT a permit for the march.

CUT chief Arturo Martinez criticized the decision to ban the protest and said he will pursue legal action against the regional governor, Cecilia Perez.

While Chilean unions are demanding the minimum wage be raised to $500 a month, President Sebastian Piñera's right-wing government is proposing an increase of only $22, to $386. EFE