“The basis of the home is commonality and mutuality. A good home is not aware of any privileged or slighted, no darlings and no stepchildren. You see no one despise the other, no one who tries to gain advantage of others… In the good home you find compassion, cooperation, helpfulness.”

Per Albin Hansson, Swedish prime minister, 1932-1946

Every July, thousands of politicians, lobbyists and journalists desert Stockholm in a seasonal exodus of the well-connected. Their destination is Gotland, Sweden’s largest island, for a festival of politics that showcases the consensual virtues associated with Scandinavia. During Almedalen week, named after the park in the main town of Visby, Social Democrats rub along with Liberals, Conservatives, Socialists and Greens in the narrow medieval streets, competing for bar space, television interview slots and seats at myriad fringe meetings held throughout the day.

The mood is normally convivial, as befits a political elite at play before the summer break begins. But this year there was a palpable edge. On the Wednesday evening, bodyguards in dark suits and sunglasses were prowling around a main stage, on which a sniffer dog was searching. Police vans lined a nearby road.

The crowd that began to gather was notably different from the habitual Almedalen set – poorer, older and less fashionably dressed. Middle-aged couples from the south mingled with pensioners and the occasional skinhead. This was another Sweden, overwhelmingly provincial and, in these monied surroundings, somewhat self-conscious. It had assembled to listen to Jimmie Åkesson, the latest Scandinavian leader to take his party from the far-right fringes of politics to the mainstream.

Ostracised within the Swedish parliament, the anti-immigrant Sweden Democrats are the country’s fastest-growing political force. Before last September’s general election, one of their candidates had to withdraw when photographs appeared of her wearing a swastika armband. Such reminders of the party’s neo-fascist roots are a regular occurrence, but a substantial swathe of the Swedish electorate does not seem to care. The SD gained 12.9% of the vote at the election, more than doubling its share and making it Sweden’s third-largest political movement. Latest opinion polls put the party above 18%, snapping at the heels of the Social Democrats, who run an enfeebled minority government.

The pitch to voters was summed up by Åkesson in the runup to last autumn’s poll, when he tweeted: “The election is a choice between mass immigration and welfare. You choose.”

Ragna, a policewoman from Västerås, had travelled to Visby for the day to hear Åkesson. She believes that tweet got to the heart of the matter: “Instead of taking more and more people in, we have to take better care of the people who are already here,” she says. “We have housing shortages that mean our young people are trapped living with their parents. If times are tough and the state doesn’t have money, we have to think about our own people.”

Ignoring one lone protester waving an “SD = Racist” placard, Henrik Poulstrom, a 29-year-old accountant, shrugged off the idea that he might be following an extremist party. “They’re at the centre of the spectrum. They take their policies on immigration from the right and their policies on defending the welfare state from the left.” His father chipped in: “Åkesson wants to defend the way our society is. He thinks about things from a Swedish perspective.”

Åkesson joined the party in the bad old days of the mid-1990s, when its neo-Nazi associations were in plain view. The logo back then was a National Front-style flaming torch, in the colours of the Swedish flag. But when he appeared at Almedalen, wearing sharp glasses, an open-necked shirt, blue jacket and chinos, the 36-year-old Lund graduate resembled an ambitious mid-ranking company manager. Behind him was the new party emblem, introduced in 2006 – a soothing blue and yellow anemone hepatica flower, and the slogan: “Sweden’s Opposition.”

Three themes dominated the speech: the danger of Islamism, which Åkesson has described as “the Nazism of our times”; the need to stop the flow of refugees and asylum seekers – Sweden takes more asylum seekers per capita than any other EU country; and the desire to create a better society for Sweden’s children. Åkesson claimed that if the Sweden Democrats eventually claim a place in government, Swedish children would experience “the best childhood in the world”. As a taster, a more generous policy on pay for primary school teachers was unveiled. Schools and healthcare will, Åkesson stated, be a priority for any Sweden Democrats administration.

The night included a symbolic walkout by a group of young Swedish Muslims. It ended with a promise that prompted an ovation: “Take my word for it,” said Åkesson, “We will be the largest party at the next election.”

From the packed terrace of a restaurant overlooking the park, 100 or so onlookers from the “other” Almedalen looked on in silence. Lotta Gröning, an experienced political journalist with the Expressen newspaper, said: “It feels like it’s time to start worrying.”

For months the eyes of Europeans have been trained on the travails of Greece. But in these turbulent times a seismic upheaval is also taking place in the normally sedate world of Scandinavian politics. And it is one that, in its own way, is as significant as the emergence of Syriza, or the growing respectability of Marine Le Pen’s Front National in France. In Sweden, Denmark, Norway and Finland, the populist right is on the march – and it is wearing the traditional battle armour of the Nordic left.

During the 1930s, the idea of the Folkhemmet, or people’s home, was popularised by the Swedish Social Democratic prime minister Per Albin Hansson.It became the cornerstone of the world’s first and most advanced welfare states, in which no citizen should be left behind. Described by the Swedish author and journalist Göran Rosenberg as a place “where the state assumed the role of a benevolent paterfamilias, trusted with universal welfare”, the concept of “the people’s home” was the ideological property of the social democrats. Times have changed. In an era of globalisation, open borders and hugely reduced public spending, that ownership has expired. Others are now laying claim to the title deeds of the Folkhemmet, while promising to pull down the shutters and lock the rest of the world out.

The SD’s extraordinary surge in support echoes the rise of the Dansk Folkeparti (Danish People’s party), which shocked Denmark by coming second in June’s general election after promising bigger increases in public spending than its rivals and a restoration of border controls. In Norway, the right-wing populists of the Progress party have been a junior partner in government with the Conservatives since 2013. The Finns party, which shares the growing taste for “welfare nationalism”, forms part of the administration in Helsinki. It is in disgruntled regions such as Jutland that the new politics is being forged. Notoriously stoic, “Jyllanders” like to say they live in “far-away Denmark”, out of sight and out of mind when it comes to the Copenhagen politicians who decide the fate of the country. While the capital recently rebranded itself “cOPENhagen”, to celebrate its role in the global economy, the curve of Jutland’s western flank has been dismissed as part of Denmark’s “rotten banana”, blighted by depopulation and unemployment.

So when a Jutland boy achieved one of the most impressive election results in living memory, local celebrations were intense and prolonged. Athletic, clean-cut and youthful, the leader of the Danish People’s Party, Kristian Thulesen Dahl, is far less outspoken than his predecessor, Pia Kjærsgaard, who once described Muslims as people who “lie and deceive, cheat and swindle”. On 19 June, when his party stunned the country by taking 21.1% of the overall vote, Dahl more or less swept the board in Jutland.

The 45-year-old has a reputation for understanding small towns and small-town people’s concerns. A Liverpool supporter, he likes to return from the capital on Mondays to his home county of Vejle for an “old boys” football game. But Dahl’s triumph was not just that of a local boy made good. It was an object lesson in stealing the clothes of the traditional left.

The DPP offered a bigger increase in public spending than Helle-Thorning Schmidt’s Social Democrats. Dahl also pledged to divert resources from refugees and asylum seekers to improving the care of the elderly. One of the most popular policies, amid widespread concern over the quality of social care, was the promise of at least one bath a week for the old and infirm who were living at home. According to one recent survey, 55% of Danes believe that EU migrants come to the country to gain access to benefits. So calls for a Brussels welfare opt-out, in order to fund pension entitlements for poorer Danes, went down well.

And as part of its public spending programme, the party proposed to extend eligibility for unemployment benefits from two years to four, a reversal of a cut by Thorning-Schmidt in the previous parliament, when the prime minister known to critics as “Gucci Helle” was seeking to trim costs. Unsurprisingly, the DPP now boasts a bigger proportion of working-class voters than the Social Democrats.

Mogens Madsen, editor of the Vejle Amts Folkeblad newspaper that covers Dahl’s constituency, watched the Jutland landslide take place.

“A total of 741,746 people voted for the DPP and they weren’t all racists,” he says. “They got some success due to immigration, but it was mainly that they were taking up the issues that concern ordinary Joes.

“In areas like Jutland, people got tired of hearing Helle Thorning-Schmidt saying that Denmark was out of the crisis, creating good jobs again. People couldn’t see those jobs around here. Maybe it’s happening in Copenhagen, but not here. It’s impossible to sell your house for a decent price because people don’t want to move here. People were sick of this dream picture from Helle.”

In Charly’s pub in the centre of Vejle, Peter Thomsen, the owner, is mildly shocked that he has become a DPP convert. “It’s a bit crazy,” he says. “Ten years ago my ex-girlfriend voted for the DPP and I was like, ‘what the fuck?’ But now I’m voting for them. When I was at school, politics was divided into left and right: the left – the social democrats – were for the poor and vulnerable, and the right were for the big businessmen. But it’s not that simple any more. Basically, our welfare state has created a beautiful society but we need to keep it that way.”

Over a drink in Charly’s, Lone Lincoln Steffensen, the DPP’s regional vice-president, repeats the sentiments of Ragna from Västerås. “We need to take care of those who are here rather than take more in. And we need better controls over our borders. Free movement of labour in the EU means that people are able to undercut pay rates. Everyone here wants David Cameron to succeed in getting his reforms.”

Steffensen’s 19-year-old daughter, Stina, has just graduated from high school and wants to study politics at university: “It would be nice if in 20 years’ time hospital care will still be free,” she says “but that’s going to be difficult to achieve. I will pay my taxes so I want to be sure that I’m will get something worth having back. When my friends say the DPP is a racist party, I tell them come and hear what is being said. It’s not all about kicking people out of Denmark.”

Back in “cOPENhagen”, the post-election inquest is still going on. According to Maja Horst, a senior academic at the capital’s business school, there is now a serious divide emerging between urban and rural Danes, between the educated and less-educated, between the cosmopolitans and the communitarians. “There’s been a lot of talk about the ‘politics of the necessary’,” says Horst. “We’re told unemployment benefits for a longer period are not possible. People must work for longer and retire later. There’s been a lot of talk about the ‘competitive state’ replacing the welfare state to compete in the global era. But in the countryside, where people are not so confident about the future, the DPP has placed itself on the side of ordinary people, on the side of ‘protecting the Denmark we know’. The trouble is that in attempting to get back that feeling that we’re all in it together, they end up hitting on the immigrants.”

The day after Åkesson’s Almedalen park speech, Mona Sahlin was also trying to explain what’s going wrong. Sahlin led the Swedish Social Democrats from 2007 to 2011 and is now the country’s official coordinator against violent extremism. She knew the Sweden Democrats leader as a young tyro in the 1990s. “If someone had told me then that I’d be sitting on the grass at Almedalen in 2015, discussing whether Jimmie Åkesson could be leading the largest party after the next election I would have just laughed,” she says.

So how has it come to pass?

“Some people might think it’s all about immigration but I don’t think that’s the whole story,” says Sahlin. “There is something lacking in mainstream politics. People like those who came to see Åkersson don’t trust politicians any more. They don’t trust Stockholm. They think things aren’t fair. They feel they aren’t listened to. They don’t listen to the same music or live in the same places as a perceived elite. There is a need to reconnect.

“But mainstream politicians must have the courage to take Åkersson on. Why does no one call him out on the fact that he says he hates Islamic State, but many of the 80,000 asylum seekers Sweden is taking in are fleeing IS? What hypocrisy!”

Journalist and author Lisa Bjurwald remembers covering the Sweden Democrats in 1996 as a young reporter. “There were guys throwing bottles at me shouting ‘Jew journalist’. They have now ditched the Aryan race, white nation stuff of course, because they’re cynical and power-hungry.”

The author of Europe’s Shame, a study of the rise of the European far right, Bjurwald views the journey of Åkesson into the mainstream with indignation. “They are managing to position themselves as caring and patriotic. Against ‘Islamicisation’ but pro-family and pro-welfare state. Åkersson is like a blank sheet of paper. The middle-class boy next door. A good degree, two cats, a baby son. But over half a million Swedes have voted for a party whose hardcore voters and local politicians have called Roma people swarms of locusts, and called black people apes.”

In the runup to Åkersson’s Almedalen speech, older members of the audience were artfully taken back to their childhoods, as the sound system played a song from the 1971 film Emil of Lonneberga, based on the much-loved books by Astrid Lingren, who also introduced the world to Pippi Longstocking. The film, set in rural Småland where life was hard but neighbours helped each other out, is an evocation of innocent, simpler times. For a long time – longer than anywhere else in Europe – Scandinavian democracies seemed to hold on to those times. Not any more.