The treatment of ETA's jailed members is one of the most sensitive issues in a standoff between the Spanish and French governments on one side and western Europe's last major armed secessionist movement on the other.
ETA is blamed for 829 killings in its campaign for an independent Basque homeland in northern Spain and southwestern France. In 2011 it declared an "end to armed activity", but refused to formally disband.
The demonstration planned today in the Spanish Basque city of Bilbao is an annual event but came this year at a particularly tense time.
A judge at Madrid's top criminal court, Eloy Velasco, yesterday issued a ruling prohibiting the demonstration.
The judge believed the demonstration was organised by a banned support group called Herrira, which was broken up in October, according to a written ruling.
The official organisers, a pro-independence Basque collective called Tantaz Tanta (Drop for drop), cancelled the protest after the announcement it had been banned.
A group representing the prisoners last month said they had softened their demands on the conditions of their imprisonment, in an apparent attempt to engage the Spanish and French governments.
Spanish and French leaders refuse to negotiate with ETA, which is branded a terrorist organisation by the European Union and the United States.
The group has been weakened in recent years by the arrests of its senior leaders in Spain and France.
Groups supporting the prisoners say there are about 520 prisoners who remain affiliated to ETA, most of them dispersed in jails around Spain and France.
Today's demonstration was to call for jailed ETA members to be moved to prisons closer to their families.
After the prisoner demonstration was cancelled, the Basque Nationalist Party (PNV) and other leftist independent Basque groups called for a silent protest to be held today in Bilbao.
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