The protesters, many wearing black shirts and headbands reading "defend democracy, retract service trade pact," crowded the streets leading to the presidential office, despite fresh concessions offered by Ma to further scrutinise agreements with China.
Sunday's mass demonstration comes a week after violent clashes broke out when a group of protesters stormed the top government headquarters.
More than 100 people were injured when baton-wielding riot police used water cannon to disperse demonstrators. Around 200 protesters remain in the main chamber of parliament, the site of an occupation since March 18.
But despite President Ma's conciliatory moves, many demonstrators remain unmoved.
"What President Ma has offered may look like goodwill, but once you have a careful look you find he has not responded to our key demands," student leader Chen Wei-ting told the crowd on Sunday, to thundering applause.
"We're here to show the resolve of the people," he said, as protesters chanted slogans and gave impromptu speeches to keep spirits high.
Before the rally dispersed peacefully, student leader Lin Fei-fan claimed the demonstration had drawn half a million people, telling the crowd: "You've made a new chapter in Taiwan's history...This victory belongs to all people in Taiwan."
Police, however, put the estimated turnout at around 120,000.
The large turnout could slow the fast warming ties between Taipei and Beijing, with student leader Lin challenging the detente launched by Ma of the China-friendly Kuomintang party.
"This rally empowers us to define the relation between Taiwan and China. We want to tell the government Taiwan's future belongs to all the people in Taiwan, our future will be decided by ourselves."
Lin added that protesters would continue occupying parliament which he said had failed to reflect public opinion.
- Barbed wire barricades -
Security was tight as 3,500 police were deployed in the official presidential neighbourhood, which was barricaded by barbed wire.
The demonstrators insist that the service trade agreement be retracted by the government from parliament, and a law be introduced to monitor all agreements with China.
"The people cannot accept the government's reckless decision to sign the service trade pact with China. The government doesn't listen to the people," said protester Ko Hsuan-yu, a 25-year-old graduate student.
Ma, who has sought closer ties with China since becoming the island's leader in 2008, said Saturday he would agree to demands that a law be introduced to monitor all agreements with China.
However, he rejected the protesters' main demand -- that the service trade agreement signed with China in June last year be retracted, saying it could "cause too much damage to Taiwan".
Ma has warned that failure to ratify the pact would be a grave setback to Taiwan's efforts to seek more free trade agreements and avoid isolation as regional economic blocs emerge.
The demonstrators were also unhappy with what they said was the opaque procedure for negotiating with China, sparking accusations that the island's national interests were to be traded in exchange for marginal economic benefits from Beijing.
In Hong Kong, hundreds of students and activists staged a rally in a busy shopping district to show support for the student movement in Taiwan. Many of the marchers were dressed in black and carried sunflowers, a symbol of the anti-government movement.
The pact is designed to open up further trade in services between China and Taiwan, which split 65 years ago after a civil war.
The deal is a follow-up agreement to a sweeping Economic Cooperation Framework Agreement signed in 2010 to reduce trade barriers between China and Taiwan.
Ma, whose approval ratings sit at just 10 percent, has overseen a marked thaw in relations with Beijing since he came to power pledging to strengthen trade and tourism links. He was re-elected in January 2012.
But China still considers Taiwan as part of its territory awaiting reunification -- by force if necessary.
Taiwan stages mass anti-China trade pact rally
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#1 Taiwan stages mass anti-China trade pact rally
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