* Festive mood, police keep low-key presence
* Former Labor Secretary Reich salutes protesters
By Laird Harrison
BERKELEY, Calif., Nov 16 (Reuters) - Protesters at the University of California, Berkeley, pitched tents on Tuesday night in defiance of campus officials a week after police removed a nascent anti-Wall Street encampment.
The late-night escalation by students and other protesters followed a day of peaceful demonstrations against economic inequality and cuts to higher-education spending and set the stage for a possible showdown with police.
It also came hours after nerves on the campus famed for its 1960s student activism were jarred by an afternoon shooting in a computer lab that police said appeared unrelated to the rallies in Sproul Plaza, about half a mile (1 km) away.
Police estimated the size of the crowd reached as many as 3,700 people at its peak a few hours after dark.
The mood was festive as the night wore on, with the crowd diminishing and police keeping a low-key presence at the fringe of the plaza.
Police Lieutenant Alex Yao said told Reuters that police were "working with university administrators at this point to try to determine a course of action overnight."
UC Berkeley police said they shot and wounded a man who drew a gun from his backpack in the lab at the Haas School of Business and displayed it in a threatening manner. The man, who was not identified, was taken to a hospital for surgery, the university said, but no one else was hurt.
News of the shooting spread quickly on campus as the university transmitted text alerts to students advising them of the incident. Protesters sent out their own Twitter message declaring they would not be deterred from rebuilding an "Occupy Cal Encampment" torn down by police the previous week.
Organizers from student, faculty and labor groups had called for a daylong campus strike featuring teach-ins, public readings, workshops and marches in response to the arrest of 39 people last week after demonstrators briefly tried to "occupy" the campus with tents.
Tuesday's rallies were bolstered by members of the Occupy Oakland movement, who were evicted on Monday morning from their own camp in that city's Frank Ogawa Plaza near downtown and who marched north to join protests at Berkeley.
In New York on Tuesday, a judge upheld the city's right to evict Occupy Wall Street protesters from a park after baton-wielding police in riot gear broke up a two-month-old demonstration that inspired similar movements throughout the United States and the world.
ACTION SHIFTS FROM OAKLAND
Former U.S. Labor Secretary Robert Reich hailed the Berkeley protesters in a late-night speech from the steps of Sproul Hall, invoking the leaders of the 1964-1965 "Free Speech Movement" at Berkeley.
"The Occupy movement is beginning to respond to the crisis in democracy," he said. "You are already succeeding. ... The days of apathy are over, folks. Once this has begun, this cannot be stopped and will not be stopped."
Shortly after 8 p.m. local time, activists huddling in a "general assembly" meeting voted overwhelmingly to re-establish an encampment in defiance of campus rules. Within about 90 minutes, at least 15 tents were erected and many other protesters pulled out sleeping bags.
"We will not be moved!" shouted a speaker who announced the vote. "Power to the people. We are here to stay."