UPDATE 4-Police in Kuwait teargas opposition protesters
* Planned changes to election law sparked protest
* Stock market falls as much as 3.4 pct
* Emir has warned of threat to unity
By Ahmed Hagagy
KUWAIT, Oct 21 (Reuters) - Police in Kuwait used teargas, stun grenades and baton charges on Sunday to disperse tens of thousands of demonstrators protesting against changes to the electoral law which the opposition has called a constitutional coup by the government.
Demonstrators gathered in various parts of the capital, Kuwait City, to march towards the government's headquarters, but riot police swiftly surrounded some groups and used teargas and stun grenades to disperse them, Reuters witnesses said.
A medical source said at least 29 people had been admitted to hospital, most of them suffering from teargas inhalation or from baton bruises. At least 15 people, including two former MPs and a reporter, were detained. An opposition activist estimated that up to 50,000 people had gathered in different locations.
The opposition decided to take to the streets after the government - which is dominated by the ruling Al-Sabah family - announced last week it was calling elections for Dec. 1 and would change the electoral law "to preserve national unity".
The announcement was the latest move in an intensifying power struggle between the ruling establishment and parliament that has seen eight governments come and go since the emir, Sheikh Sabah al-Ahmad al-Sabah, came to power in 2006.
The 83-year-old dissolved parliament on Oct. 7. It was the sixth time the oil-rich state and key U.S. ally had disbanded its legislature since early 2006. Its oil wealth and a generous welfare state have helped Kuwait avoid the kind of "Arab Spring" protests that toppled leaders elsewhere in the region.
Before Sunday's protest got underway, the authorities had promised to "decisively confront" demonstrators.
Witnesses said protesters who had initially been dispersed later regrouped to form a crowd estimated at more than 20,000 at a main road near Kuwait Towers, a seaside landmark in the Gulf oil producer.
"The decree is void, void," some protesters chanted, referring to the emir's order for a change to the election law. Demonstrators said they had were motivated by a feeling of injustice.
"We are entering a dark tunnel," said Salem al-Ajmi, a 30-year-old man, after police blocked him from reaching Kuwait Towers.
The protest ended just before midnight after police told demonstrators to leave or be evacuated by force, said news website www.alaan.cc.
Human rights lawyer Mohammed al-Humaidi said he estimated the number of people injured was as high as 100 rather than 29 and said some of them were in a serious condition, the same website reported.
Kuwait has been convulsed by regular demonstrations since last year, and the opposition - including Islamists, liberals and tribal figures who won a majority in the 50-seat parliament in the last election in February - have rejected the emir's proposed changes and said they will boycott the vote.
The opposition has called the changes - which allow voters to choose only one candidate per electoral district - "a coup against the constitution", saying the reform would prevent its candidates from winning the majority they won in the last vote.
Forging an electoral alliance, which depends on supporters of one candidate voting for another in exchange for reciprocal support, would become unfeasible under the new system, they say.
CRITICISM OF THE EMIR
Kuwait's opposition has been emboldened after Arab protests toppled four heads of state.
Some have been demanding a constitutional state and for the emir to resign but for governments to be formed by majority groups in the 50-member assembly. Others have made more modest demands for the government formed by the emir to be subject to full parliamentary scrutiny.
The Al-Sabah dynasty has ruled Kuwait for more than 250 years and although Kuwait allows more freedom of speech than some Gulf states, the emir is seen as untouchable and is referred to as "immune and inviolable" in the constitution.
Kuwaiti authorities arrested two opposition politicians on Thursday and interrogated a third after they made comments seen as criticising the emir.
The events prompted the Al-Sabah family to issue a rare statement on Thursday calling for obedience to the emir.
On Monday, police and protesters fought over a barricaded street after 5,000 people demonstrated outside parliament. Security forces arrested at least five people, including two former members of parliament.
The deepening crisis has taken its toll on the stock market, which dropped as much as 3.4 percent on Sunday, heading for its biggest daily fall since mid-2009, when shares were hit by the global financial crisis.
The crisis escalated in June this year when the top court annulled the last election which had been held in February, reinstating the previous, more government-friendly assembly.
Unlike other Gulf Arab states, Kuwait enjoys a more open political system that allows some parliamentary scrutiny over government decisions. But the emir still holds key levers of power, including appointing the prime minister.
The turmoil has not only paralysed the political system but also blocked major economic development plans.
Sheikh Sabah warned in a speech on Friday that the recent political turmoil could lead to "strife that could be about to erupt and destroy our unity, disfigure our identity and tear apart our society into fragmented groups".