ZAGREB, Croatia (AP) _ More than 100,000 people demonstrated in support of Croatia's last independent radio station Thursday, even though the government reversed its decision to shut it down.

What began as a gathering for Radio 101's survival turned into the biggest peacetime political rally since Croatian independence in 1991.

``Let this be the first step on a new path for Croatia,'' Vlado Gotovac, the leader of the opposition Social Liberals, told the crowd.

``People, look around and see how glorious freedom is,'' he said. ``You and Radio 101 are not a small isolated island. Your voice will spread all over Croatia.''

The demonstration took place despite the government's decision to let the radio continue broadcasting.

It ended without incident after Radio 101 managers bade demonstrators a good night and appealed to them to leave the square peacefully.

On Wednesday, Croatia's radio and TV licensing agency said it was reassigning the frequency of Radio 101, which is critical of authoritarian President Franjo Tudjman, because it was ``too politicized.'' That night, 6,000 people took part in the biggest spontaneous political protests in recent memory. The U.S. State Department also criticized the move.

The licensing agency said Thursday it would open new bidding on the frequency, which would allow Radio 101 to continue operating.

Tens of thousands converged on downtown Jelacic square and filled the streets nearby in a rally organized by a human rights group and Zagreb's Students' Association.

``We decided: we want information, not manipulation of media,'' said Mario Mandaric, head of student association. ``We want a city of freedom instead of Balkan rhetoric, a country of free people, instead of a country of fear.''

The crowd screamed approval and applauded. People carried banners reading ``Do not shut down Radio 101'' and candles to symbolically enlighten Croatia.

With the state controlling nationwide television and radio and three of the four national newspapers, Radio 101 is the medium of choice for increasingly dissatisfied Zagreb residents, who voted heavily for the opposition in local elections last fall.

Asked whether Tudjman, who is hospitalized in Washington, was informed about the latest events, Zagreb party chief Zlatko Canjuga said: ``Yes. Without his knowledge and support we would not have come out with this statement.''