Dutch squatters were planning demonstrations in Amsterdam today as a new law made squatting illegal.

It is the latest of the country's liberal institutions - such as legal prostitution and cafes that openly sell marijuana - to be abolished or cut back as the Dutch rethink the boundaries of their famed tolerance.

Now the followers of the movement known in Dutch as "kraken," or "breaking," face up to one year in prison.

"Of course we're going to resist: resisting is part of what we do," said a young English-speaking woman at an Amsterdam squat.

A study by Amsterdam's Free University estimated the number of squatters at roughly 1,500 in the Dutch capital, a city of 750,000. Amsterdam mayor Eberhard van der Laan says he plans to gradually empty the city's remaining 200 squats.

"Here and there squatting definitely causes problems for a neighbourhood," he said, but until now it has been seen mostly as a civil dispute between owners and occupants.

Now building owners can argue that squatters are breaking the law, the mayor said.

Amsterdam and other Dutch cities remain unusually liberal, even by European standards, but they have gradually moved away from their free-for-all attitudes. Prostitution is legal but has become more regulated, and Amsterdam has shuttered one-third of its brothels.

The number of marijuana cafes is declining amid new restrictions to distance them from schools.

Squatting gained public sympathy after the Second World War during a time of severe housing shortages and anger at property speculators.

But views changed as the Netherlands grew more prosperous and more sympathetic to business.