The weekly cabinet meeting usually takes place in Madrid but Prime Minister Pedro Sanchez's Socialist government decided to hold it in the Catalan capital as part of its efforts to reduce tensions in Catalonia.
It appeared to have the opposite effect in some of streets of the capital of the northeastern region, which last year made a failed attempt to break away from Spain.
AFP reporters saw lines of riot police lashing out with their batons as they charged a crowd of protesters who tried to breach a police barrier a few hundred metres (yards) from where the meeting was taking place.
Sanchez and the head of Catalonia's separatist government, Quim Torra, have expressed commitment to an “effective dialogue” to try to resolve the dispute over the wealthy region's status within Spain.
The government was aiming to use the cabinet meeting to approve a 22 percent increase in the minimum wage, a pay hike for public workers and announce investments in infrastructure projects in Catalonia.
But separatist leaders said the timing of the meeting was provocative: a year to the day after Madrid held snap elections in the region after blocking its move for independence.
Spain's wealthiest region, Catalonia is home to some 7.5 million people and has its own language.
A radical separatist group, the Committees for the Defence of the Republic (CDR), blocked a dozen main roads from around dawn on Friday, regional transport authorities said.
“We will be ungovernable on December 21,” the group repeatedly tweeted.
A grassroots separatist organisation, ANC, urged supporters to block the streets of Barcelona on Friday with their vehicles.
— CDR Catalunya (@CDRCatOficial) December 21, 2018
About 20 pro-independence groups, including the ANC, called on their supporters to march through the streets of Barcelona at 6pm (1700 GMT).
The Spanish government sent police reinforcements to Barcelona and Catalan leaders repeated their call for protests to be peaceful.
The regional police force said at least one demonstrator was arrested for carrying material that could make an explosive or incendiary device.
Catalonia declared independence in October 2017 after pushing ahead with a banned independence referendum, but Spanish authorities stifled the attempt.
Several Catalan independence leaders were detained and charged.
Sanchez took office as prime minister eight months later after winning a surprise vote of no-confidence against the previous conservative government with the support of Catalan separatist parties.
Sanchez initially adopted a more conciliatory tone towards Catalonia than his conservative predecessor but the effort to ease tensions with the region hit a wall.
The two men held talks in Barcelona on Thursday night, drawing fire from Sanchez's political opponents.
The leader of the conservative opposition Popular Party in parliament, Dolors Montserrat, branded the meeting “shameful” and “a betrayal of Spain”.
Catalan separatists also announced that they would not vote in favour of Sanchez's 2019 budget after public prosecutors in November called for stiff prison sentences for 18 pro-independence leaders facing trial over the failed secession bid.
Sanchez adopted a harder line after far-right and anti-separatist party Vox won seats for the first time earlier this month in a regional election in Andalusia, a Socialist stronghold.
During a recent debate in parliament, he compared Catalonia's breakaway movement to Britain's campaign to leave the European Union. Both were built on “a tale of invented grievances, magnified by manipulation”, he said.
His tone changed again after his meeting with Torra, although the solutions to the Catalan conflict proposed by the two leaders remain distinct.
Sanchez has proposed giving Catalonia more powers while Torra wants a legally binding referendum on independence.
“We know that the initial positions are very divergent,” Catalan government spokeswoman Elsa Artadi said. “But we have to see how we can advance.”