BARCELONA/MADRID, Oct 27 (Reuters) - The Madrid government sacked Catalonias president and dismissed its parliament on Friday, hours after the region declared itself an independent nation, in Spains gravest political crisis since the return of democracy four decades ago.

A new election will be held in Catalonia on Dec. 21, Prime Minister Mariano Rajoy said in a televised address on a day of high drama.

As well as removing Carles Puigdemont as head of the autonomous region, he also fired the police chief and said central government ministries would take over the Catalan administration.

Spain is living through a sad day, Rajoy said. We believe it is urgent to listen to Catalan citizens, to all of them, so that they can decide their future and nobody can act outside the law on their behalf.

As he spoke thousands of independence supporters packed the Sant Jaume Square in front of the Catalan regional headquarters in Barcelona, their earlier celebratory mood dampened by Rajoys actions.

In a stunning show of defiance to Madrid, the Catalan parliament had voted in the afternoon to make a unilateral declaration of independence.