Far-right groups from across Europe, including members of the English Defence League (EDL), are holding a rally in Denmark in a bid to set up "an anti-Islamic alliance" across the continent.

The demonstration in Denmark's second city of Aarhus is expected to draw anti-Islamic groups from countries including Russia, Finland, France, Germany, Norway, Poland, Romania, and Sweden.

The EDL, which has organised the rally, said it was not expecting large numbers – perhaps around 700 – but said the event signalled the beginning of a Europe-wide movement against the "Islamification of Europe".

They will contest the streets of with a coalition of anti-racism groups who have organised counter-protests. The prospect of clashes has struck fear into some residents. Danish police are expecting thousands of anti-racism campaigners, and vowed to keep the groups apart.

EDL leader Stephen Lennon said: "We're not expecting big numbers in Aarhus. The demonstration will be an opportunity to build stronger ties with our European friends, as together we send a clear message to the leaders of Europe."

Nottingham University's Matthew Goodwin, an expert on far-right groups in Britain, said the meeting would be strategically significant even if the numbers were not.

"What we are seeing here for the first time in British political history is an anti-Muslim far-right organisation taking the lead in trying to mobilise pan-European opposition to Islam," he told the BBC.

The mayor of Aarhus, Jacob Bundsgaard, has urged people to go about their business as normal. Last week, he fronted the city council's own march for tolerance and diversity, and said the extremists were not welcome in Aarhus: "Let them come – and let them go away again without much ado."