Far-right supporters have attacked police as violence erupted following a protest outside a hotel housing asylum seekers in Essex.

Hundreds of people had earlier staged a fresh demonstration outside the hotel in Epping that has become a flashpoint of anti-immigration protest, days after two security guards were seriously assaulted during a previous gathering.

Local people, including women and children, were among those who gathered outside the hotel on Thursday and they were joined by far-right activists with loudspeakers and banners.

However, while the protest outside the hotel passed off peacefully, there were clashes later and riot police donned helmets and took up positions while crowds of men, some masked, surrounded a small counter-demonstration by antiracism activists.

The counter-demonstrators and police were pelted with plastic bottles, eggs and flour but the violence worsened as those in the crowd directly attacked the police and vandalised police vans as officers withdrew.

Those in the crowd throwing projectiles included children who had donned masks and appeared to be in their preteens, while the town’s high street was blocked off for hours in a tense stand-off.

Police had warned earlier in the day that criminal violence would not be tolerated, amid tensions in the town, where the far right has been trying to exploit opposition to the housing of asylum seekers in the hotel.

The assaults on the security staff on Sunday were being treated by investigators as racially aggravated.

Both men received hospital treatment for serious injuries, according to the force, which said it had arrested a man after damage was caused to the Bell hotel by an individual who was seen shouting racial abuse outside it.

Tensions were high ahead of the latest appearance in court on Thursday of an asylum seeker who has been charged with three counts of sexual assault. Hadush Gerberslasie Kebatu, 38, from Ethiopia, who denies the offences, was remanded in custody before a two-day trial next month at Chelmsford magistrates court.

An antiracism demonstration took place near the town’s railway station on Thursday and hundreds of people later congregated outside the hotel, with a flat-bed trailer on a lorry bearing a banner that read: “Protect our kids”. Those present included activists wearing T-shirts of the Britain First party. Far-right activists, who have a significant local presence, were central to the protest on Sunday and have been vocal on community Facebook groups.

Two local Conservative MPs called on Labour to immediately close the hotel and another in Epping, which have been used to house asylum seekers. The situation had become “increasingly alarming and distressing in recent days”, said Neil Hudson and Alex Burghart.

Weyman Bennett, co-convenor of Stand Up To Racism, who was part of the counter-protest, said that a peaceful demonstration made up of local and trade unions had been attacked by groups led by the far right.

“It is important to stand up against division; otherwise, we will witness a pogrom-type movement,” he added.

The flare-up comes ahead of the first anniversary of last summer’s riots, which began after the murders of three young girls in Southport and resulted in attempts to burn down hotels housing asylum seekers.

The chief executive of the Refugee Council, Enver Solomon, said there was a need to speed up plans to end the use of asylum hotels, which he said had become a “flashpoint for tension in communities, cost billions to the taxpayer, and leave people trapped in limbo”.

Security fencing went up around the hotel on Wednesday. A man who said he was an asylum seeker from Libya told the Guardian that he and others still felt safe. “We are being treated well and we just want our cases to be heard,” he added. “There is no trouble.”

A local resident said that while they and others in the community had concerns, it was also the case that outside elements and local activists had been trying to inflame the situation.

“Most people would rather it was not there, that it was back as a hotel, but it is what it is and maybe there’s a case for new arrivals to be kept somewhere more secure and be checked.”

Ch Supt Simon Anslow said:

“People protesting peacefully, lawfully and responsibly cause us – and the wider public – no concern. However, we can never and will never tolerate criminal violence of any sort and anyone identified as committing crime will be dealt with robustly.”

A Home Office spokesperson said the government had already taken action to ban foreign nationals who commit sexual offences from being granted asylum.

“The right to protest is fundamental to our democracy, but this cannot cross the line into unlawful or violent behaviour. We continue to work closely with Essex police,” she added.