The rally, organized by a pro-democracy online group, sought to urge the UK government to "take immediate action on China for not honouring the Sino-British Joint Declaration" and "acknowledge" that the formula established in the handover deal reached between the two powers in 1997 was "not functioning", reports Efe news.
Under the "one country, two systems" formula, Beijing agreed to allow the former British colony to retain a semi-independent status - including certain legal rights not contained in the mainland Chinese system - until the pact's expiration in 2047.
One of the participants in the rally, a man said the formula was "virtually dead".
"I hope the UK will make China adhere to the Sino-British Joint Declaration so that we can have universal suffrage, as we have been promised," he told Efe news.
"Britain may be plagued by many domestic problems today, but I came out not because there is hope; I came out so that there may be hope."
Standing outside the consulate complex, the demonstrators chanted slogans like "Save Hong Kong", "The Joint Declaration is Dead" and "God Save the Queen".
Some waved the Union Jack while others held signs bearing messages meant to be conveyed to Downing Street.
One of the protesters held a placard printed with an image of Winston Churchill alongside a famous quote commonly attributed to the late British Prime Minister: "The price of greatness is responsibility."
The British anthem was played through a loudspeaker every now and then.
Reading a statement to the crowd, one masked organizer said that the Sino-British Joint Declaration was being breached and that the "one country, two systems" formula was dysfunctional.
He also claimed that "each and every aspect" of Hong Kong was under the direct command of the Chinese government.
"As the signatory of the legal treaty of the Joint Declaration, the British government should not remain reluctant to take concrete action," the statement added. "The British government must fulfill its historical and legal obligation to Hong Kong."
The rally came exactly one week after 250,000 people marched to the consulate general of the US, calling on Washington to pass a congressional bill that could restrain the Hong Kong and Chinese governments from suppressing the city's human rights and freedom.
( With inputs from IANS )