The number of violence-prone neo-Nazis in Germany rose by more than 10 per cent in 2010 to 5,600, according to the Federal Office for the Protection of the Constitution.
At the same time, the membership of Germany's main far-right party, the National Democratic Party, is dropping, according to reports. But that does not make the extremists any less dangerous, said Heinz Fromm, head of Germany's intelligence agency.
In an interview with the Neue Osnabrücker Zeitung newspaper, Mr Fromm said that the number of those prepared to commit violent acts had grown in recent years, and was now more than twice the figure of 10 years ago.
Mr Fromm said the number of violent neo-Nazi anarchist youth rose from 800 in 2009 to 1,000 in 2010, but the total number of far-rightists dropped by 1,600 to a total of around 25,000.
He said the NPD - which has an antisemitic platform and tries to downgrade the suffering of Holocaust victims by comparing them to German civilians who suffered during the war - had been losing affiliates since at least 2007, when its membership reached a peak of 7,200. Today's membership is about 6,600, he said.
The party did not manage to get the required five per cent of the vote to win seats in the parliament of the former east German state of Saxony-Anhalt last month, although it does have legislators in two former east German states, Mecklenburg and Western Pomerania.
Despite the loss of members, the party remains a threat, and may well pass the five per cent threshold in one of those two states in the September elections, Mr Fromm said.
In recent elections, various right-wing extremist parties have colluded to help each other gain the required five per cent by pledging not to run against one another. But according to experts, these parties still do compete with each other, with some taking more aggressive views on the Holocaust.
Outright denial of the Shoah is illegal in Germany, and the neo-Nazis play it safe from a legal standpoint by disputing the numbers of those killed or the severity of the genocide.
Meanwhile, a German court in Koblenz jailed nine men for running a neo-Nazi radio station. The men received sentences ranging from 21 months to three years. The others were given suspended sentences.
According to AFP, the young men had been spreading racist and antisemitic propaganda through Widerstandradio (Radio Resistance). It was shut down last November.