HARSH reality finally caught up with Formula 1 racing in Bahrain yesterday as protesters flooded the main roads leading to the capital, Manama, throwing petrol bombs in a series of hit-and-run battles with the security forces.

In retaliation, tear gas was fired, arrests made and one protester shot dead as opposition activists attempted to take possession of the capital in advance of today's grand prix. But as the city burned, the organisers of the event vowed that the show would go on – whatever the consequences.

Following further disturbances after Friday prayers it became clear that demonstrators were going to use the grand prix as a focus for their demands for greater democracy and would not be deterred by an increasingly heavy-handed government clampdown. A leading Shia cleric, Sheikh Isa Qassim, used the moment to attack the government for ignoring the protesters and placed the blame on authorities for manufacturing this weekend's confrontation, claiming in his sermon: "This is the crisis of a government that does not want to acknowledge the right of people to rule by themselves and choose their representatives."

With local activists promising to produce "days of rage" during this weekend's event, there are signs that they are attempting to build on last year's civil unrest which claimed around 100 lives and led to the mass arrest of 1600 protesters, many of them medical professionals, journalists and innocent onlookers. At the time, the protesters – the majority of them Shia – were demanding greater political freedom, but their demands have now escalated to include the overthrow of the Sunni king, Hamad bin Isa Al Khalifa. Last year's Formula 1 race was cancelled mainly due to security considerations, as well as growing international criticism about the bloodshed.

Since then the violence too has escalated with the Bahrain government instituting a brutal crackdown on demonstrators and turning a blind eye to the widespread use of torture by the security forces against anyone arrested. Last March, neighbouring Saudi Arabia despatched armed forces in an attempt to shore up King Hamad's position, but the government's hard-line response has simply enflamed the situation. In the run-up to this weekend's grand prix, an estimated 100,000 people took to the streets in a march which protest leaders called "the biggest in our history".

The continuing unrest in Bahrain has its origins in the Arab Spring, the wave of demonstrations and protests that swept through Tunisia and Egypt at the end of 2010 and continued throughout the Middle East and North Africa last year. At its heart are demands for political change and the liberalisation of human rights, but there are differences between countries. The continuing violence in Syria is centred on demands for change by the majority Sunni population pitted against a Shia-backed regime. The resulting clash has led to violence which has seen the deaths of thousands of protesters as well as numerous casualties in the country's security forces.

In Bahrain, the trouble has been more muted, thanks to some government concessions earlier in the year and a slick PR campaign headed by government spokesman Sheikh Abdulaziz bin Mubarak al-Khalifa – he claims "Formula 1 is important for restoring confidence in Bahrain's economy and its reputation as a tourism destination". In other words, there is a desire for "normalisation" and a willingness to place the blame for the unrest on a handful of troublemakers.

"A number of rioters and vandals had been arrested for taking part in illegal rallies and gatherings, blocking roads and endangering people's lives by attacking them with petrol bombs, iron rods and stones," a spokesman for the Information Affairs Authority said.

However, the protests are not isolated incidents manufactured by a small number of malcontents but a serious attempt by large numbers of the population to have their voices heard at a time when the Sunni rulers are equally determined to hold on to power, if necessary with the support of key backers such as Saudi Arabia and the Gulf state of Qatar.

There has also been widespread disgust at the treatment of those imprisoned by the security forces, including torture and the imposition of long jail terms for daring to oppose the regime. The human focus for this discontent is Abdulhadi al-Khawaja, one of 14 men imprisoned for their role in leading last year's uprising. Currently on hunger strike – he has vowed to fast to death – Khawaja has been described by his wife as "a pain in the neck" for the administration. Although he is a major irritant, the government dare not let him die. In fact, the impasse has allowed Khalifa, the government spokesman, to argue that the authorities are providing the best medical care even though Khawaja is allegedly one of those who have called for the death of King Hamad.

Khawaja's death would be considered a disaster, creating a martyr whose example would encourage further dissent on the street and risk spoiling government efforts to persuade western allies that a reform programme is already in place.

One solution would be to free the hunger-striker on condition that he returns to Denmark, where he has citizenship, but the royal family is reported to be divided on the issue, with young members claiming that it would be a sign of weakness.

In an attempt to resolve the dilemma, the government has cut back on the number of visas for visiting journalists, but that action has simply underlined its determination to keep the situation under its own control by limiting access to the country.

Robert Mahoney, deputy director of the Committee to Protect Journalists in New York, said: "Bahrain wants the international attention brought by hosting a grand prix but doesn't want foreign journalists to wander from the race track where they might see political protests. Bahrain tells the outside world it has nothing to hide. If that's the case, then it must allow journalists entry visas and let them report freely."

One other factor makes Bahrain different from other countries affected by the Arab Spring. Although it is a small and otherwise relatively insignificant country – the kingdom consists of 33 islands with a total population of 1.2 million, half of whom are non-nationals – it has powerful allies, notably Saudi Arabia which is joined to it by the King Fahd Causeway. Under British tutelage and protection until the Second World War, Bahrain has been home to the US Fifth Fleet since the 1990s and is considered a bulwark against Shia expansionism as promoted by Iran.

That political alignment makes it a potent ingredient in Washington's strategy in the region, and part of the wider geo-political balancing act. With Syria still in the grip of an internecine war, tensions between the Shia and Sunni populations are already stretched, with Saudi Arabia and Qatar linked to the Sunni Free Syrian Army as supporters and providers of arms. At the same time, Iran has provided expertise and funding to President Bashar al-Assad's Shia-backed minority Alawite administration.

None of this helps King Hamad in Bahrain, whose largely Sunni administration is backed by Saudi Arabia and Qatar, while there is evidence that Iranian agents have been involved in giving support to the mainly Shia demonstrators. It is only recently that Iran dropped its territorial claims on Bahrain, having claimed for many years that it was the country's 14th province.

"In a sense Bahrain provides a microcosm of the cultural and religious clashes which have complicated relationships in the Gulf and the wider Middle East," says a British diplomatic source who has long experience of the region. "It's a wealthy state through oil and tourism, yet it is too small to exist without building up alliances not just in the area but also in the wider world. That means that we cannot treat it in isolation and we have to heed what is happening there."

Such is the potency of the presence of the US Fifth Fleet and the implied strength from the causeway to Saudi Arabia – another will soon join Bahrain to Qatar – that the kingdom of Hamad bin Isa al-Khalifa is unlikely to be threatened unduly by the present unrest. But in the longer term, tensions and far-reaching socio-political problems are already building up. Many of the arrested protesters are members of the medical profession – 13 of whom were given prison sentences of up to 15 years simply for being caught tending wounded demonstrators.

Joe Stork, deputy Middle East director at Human Rights Watch, said: "The attacks on medics and wounded protesters have been part of an official policy of retribution against Bahrainis who supported pro-democracy protests. Medical personnel who criticised the severe repression were singled out and jailed, among the more than 1600 Bahrainis facing solitary confinement and ill-treatment in detention and unfair trials before a special military court."

Victims were usually tortured to gain evidence and female doctors and nurses were not immune from the attentions of the security services. According to a report published by Amnesty International last week, the crackdown has also been extended to university lecturers, government employees and students. The vast majority of those dismissed were Shia Muslims and many were investigated by unrepresentative committees who also had the power of sentencing.

The report said: "Some were dismissed for absence from work; many others were dismissed solely for exercising their rights to freedom of expression and assembly, despite the fact that they participated in the protests outside of work hours."

For those caught up in the harassment and prosecution it seems the state has declared war on them for no other reason than their religious and political beliefs, or that they were in the wrong place at the wrong time.