Big crowds of protesters returned to the streets of Kuala Lumpur on Sunday to demand the resignation of Malaysian Prime Minister Najib Razak over a financial scandal, after the first day of the massive rally passed peacefully.

The protesters camped overnight wearing yellow shirts of the Bersih movement — the coalition for clean and fair elections — even after authorities blocked the organizer's website and banned yellow attire and the group's logo in a bid to deter the rallies, which were also held in other Malaysian cities.

Former Prime Minister Mahathir Mohamad, who has been spearheading calls for Najib's resignation, added momentum to the rally when he made a surprise brief appearance late Saturday with his wife to loud cheers from the crowd, and telling protesters to "carry on."

Najib has been fighting for political survival after leaked documents in July showed he received some $700 million in his private accounts from entities linked to indebted state fund 1MDB. He later said the money was a donation from the Middle East, fired his critical deputy and four other Cabinet members as well as the attorney general investigating him.

He slammed the protests for tarnishing Malaysia's image.

"Those who wear this yellow attire ... they want to discredit our good name, scribble black coal on Malaysia's face to the outside world," Najib was quoted as saying by national news agency Bernama.

Police estimated Saturday's crowd at 25,000, while Bersih says 200,000 participated at its peak. The rally was scheduled to last until midnight Sunday to usher in Malaysia's 58th National Day.

"This is a watershed moment. Malaysians are united in their anger at the mismanagement of this country. We are saying loudly that there should be a change in the leadership," said protester Azrul Khalib, who slept on the street with his friends.

He said he was aware that the rally will not bring change overnight, but he wants to be "part of efforts to build a new Malaysia."

Some used colored chalks to scrawl their demands on the street: "We want change," and "We want clean and fair (elections)."

Scores of police barricaded roads leading to the Independence Square, a national landmark that authorities declared off-limits to protesters ahead of the national day celebrations on Monday. Previous two Bersih rallies, in 2011 and 2012, were dispersed by police using tear gas and water cannons.

Analysts said the rally attracted a largely urban crowd with a smaller participation of ethnic Malays, which could be the reason why the Najib government allowed it to go on.

"They feel safe because it has not really affected the rural Malay segment, their bedrock support," said political analyst Ibrahim Suffian. However, he said this doesn't mean that rural Malays are happy with the government, as many are upset with the plunging currency and economic slowdown.

A nation of 30 million, Malaysia is predominantly Malay Muslim with significant Chinese and Indian minorities. Its ambitions to rise from a middle income to a developed nation this decade have been stymied by slow-paced reforms and Najib's increasing authoritarianism.

Support for Najib's National Front has eroded in the last two general elections. It won in 2013, but lost the popular vote for the first time to an opposition alliance.

Concerns over the political scandal partly contributed to the Malaysian currency plunging to a 17-year low beyond 4 ringgit to the dollar earlier this month.

Apart from Najib's resignation, the demands being sought are institutional reforms that will make the government more transparent and accountable.