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The "foreign agents" bill has sparked a political crisis amid concerns it is modelled on laws used by Vladimir Putin to crack down on the media in Russia - and if passed, would make it harder for Georgia to join the EU.
Sky's international affairs editor Dominic Waghorn is in Tbilisi:
The Georgian security forces moved in shortly after dawn this morning. Phalanxes of masked men sweeping through streets and parks outside parliament.
They kettled protesters with force. We were caught in the crush as they squeezed the crowd.
A woman screamed as she was pinned to a post by the press of people.
Crowds had ringed the parliament building all night - intent on stopping MPs from voting on laws that demonstrators believe put Georgia on the path to dictatorship, and back in the embrace of Moscow.
"They want to drag us back to autocracy, to the country they occupied us for too many years," one protester told Sky News.
The police succeeded in clearing one entrance to parliament.
Flank after flank of interior ministry security forces backed by helmeted riot police and water cannon trucks are now in a tense standoff with a multi-coloured sea of protesters on the corner of the parliament building.
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The blue and green colours of Ukraine and the European Union jostle with the reds and white of Georgia's national colours.
The protesters have been peaceful, but the police have not. They have unleashed snatch squads barrelling into the crowd.
Sky News witnessed masked security forces seizing one man and raining blows on his unprotected head.
The protesters have failed in their effort to cut off parliament from MPs, but their numbers are swelling.
"We will not give up," one woman told us.
"We cannot allow them to take our freedom."
The government was forced to shelve the law last year in the face of bitter opposition but the Georgian Dream ruling party, regarded by many as pro-Russian, is determined to see it passed.