A protest led by gay rights campaigner Peter Tatchell gathered outside the National Union of Students' headquarters to campaign against the group's no platform policy.
The "safe space" rules are being abused to shut down progressive speakers, Tatchell told the 60-odd students and activists assembled.
The rally was backed by prominent academics and public figures, including philospher AC Grayling, scientist Richard Dawkins and writer Salman Rushdie.
Graduate Leo Gibbons-Plowright was one of those attending the protest. He told HuffPost UK: "If the wider student body knew about the no-platforming and shutting down of human rights activists and feminists, or the censoring of blasphemous speech, they would be appalled.
"The NUS policy of creating a 'safe space' for students has failed. You can never create safe space for everyone, the concept is fraught with hypocrisies."
He added: "I wore a Jesus&Mo t-shirt to the rally yesterday. I wouldn't be allowed to wear this in many of student unions, because it may offend some Muslim students.
"But if I am barred from union for wearing the wrong t-shirt, it is not a safe space for me? If we are to ban all images of the prophet Mohammed, for the benefit of the religious right and fundamentalists, where do we go eventually go with this?
"Should homosexuals be banned from student unions, because their presence may offend religious fundamentalists? Should we ban people from taking the God's name in vain, as it may violate a religious conservative's safe space?"
In his speech to the rally, held in Central London on Thursday evening, Tatchell said he condemned attempts to close down debate.
"We are here to defend free speech, against those who want to suppress or restrict legitimate debate.
"Some of us have political disagreements with each other on various issues. I am critical of some other people and organisations at this protest. And some of them disagree with me. That’s fine. We can agree to disagree.
"But we are all united in our agreement that free speech should be defended and that intolerant ideas should be challenged and protested against, in ways that are compatible with free speech.
"Freedom of speech is one of the most precious and important human rights. A free society depends on the free exchange of ideas. Nearly all ideas are capable of giving offence to someone."
Hanif Leylabi attended the rally because he "felt the need" to defend the NUS No Platform policy.
"It is used only in extreme organisations when the safety of students is at risk, or when hate speech would make free speech impossible," he says. "Jewish students should never be expected to debate whether or not the holocaust happened and Muslim students should never expect to have to share a space with groups who have a track record of violent anti-Muslim demonstration."
Tatchell urged the NUS to revise its no platform policy, which recently saw Iranian communist and feminist Maryam Namazie initially barred from speaking to a student atheist society.
He added: "Islamist extremists are often free to speak at universities while those of us providing a progressive counter-narrative face repeated attempts to deny or restrict our right to speak.
"We are falsely accused of ‘Islamophobia’ and ‘incitement to hatred’ when we are, in fact, challenging the Islamists’ hatred of apostates, women, LGBTs, Jews, liberal Muslims and others.
"We oppose bigotry and defend free speech. And we urge the NUS and student unions to do likewise. Free speech is a fundamental human rights and worth defending."
Megan Dunn, president of the NUS, criticised the protest, saying: "If you’ve read the newspapers or switched on the TV over the past few weeks, you’d be forgiven for thinking NUS and students’ unions are on a mission to censor, curb and restrict free speech at every given opportunity. But this is so far from the truth.
"The day-to-day reality is very different to the one set out by those who understand how to draw media attention but do not care to engage with how students’ unions work or make decisions. There are thousands of student-led speaking events held on campuses every year. Open debate is at the heart of students’ unions."
She added: "On the whole students and sabbatical officers do not enjoy the platform that prominent figures – like Peter Tatchell – do. We all have a right to have our voices heard, but I find it ironic that those who enjoy large platforms are the ones trying to shut ours down.