Its asylum policies are the continent's most generous. But the public mood is now changing

In a country that elevated social democracy into the natural form of government for decades, Maria has been a loyal stalwart. The 66-year-old retired canteen worker has always voted for Sweden's Social Democratic party, like the vast majority in her working-class suburb of Malmo. Until last Sunday, that is. That morning Maria broke the habit of a lifetime and in doing so helped redraw the map of Swedish politics. She voted for an extreme-right movement accused of being Islamophobic that broke into parliament in Stockholm for the first time, probably condemning the country to a fragile minority government.

She was not alone. In Maria's high-rise suburb of Almgården an astonishing one in three voted for Sweden Democrats, a party dubbed "racist and neo-Nazi" and led by Jimmie Åkesson, the new young darling of the European far right.

The reason is plain. Maria pointed across the dual carriageway to the neighbouring housing scheme of Rosengård, known locally as "the ghetto".

It is home to almost 20,000 immigrants, overwhelmingly Muslim, almost half of them jobless.

"It's become crazy around here. You can't go out in the evening," said Maria, who like other locals, did not want her surname revealed. "I've got nothing against foreigners. I've been married to a Bulgarian for 40 years. But these people don't share our values. If you don't like the colour of our flag, I say, I'll help you pack your bags."

Another resident, running a minicab service, remained loyal to the centre-left, but said: "Åkesson's right. Enough is enough. Even in the jungles of Africa, they don't know where Sweden is, but they know they can come here, get money and not need to work. I came so close to voting for Sweden Democrats. Maybe the next time."

Åkesson, a dapper, bespectacled 31-year-old, celebrated his party winning nearly 6% of the vote by declaring: "We're in." The Social Democrats slumped to their worst result. The same equation now applies across Europe.

Malmo, formerly an old industrial city, lays fair claim to being the cradle of Swedish social democracy. The centre-left still controls the city, but its power is eroding in what has been an exceptionally promising summer for Islam-baiting, anti-immigrant movements in Europe.

In France, President Nicolas Sarkozy has been trying to recover support he forfeited in March to the National Front by expelling Romanian Gypsies. In the Netherlands, Geert Wilders' Freedom party goes from strength to strength with his single issue anti-Islam campaign, paralysing Dutch governance.

In Austria, the extreme right leader, Heinz-Christian Strache, is running for mayor of Vienna next month. He will lose. But he looks likely to take more than 20% of the capital's vote. Next door in Hungary the radical rightwing Jobbik has gained a parliamentary foothold and is demanding permanent, guarded internment camps for Gypsies. In Italy the anti-immigrant Northern League of Umberto Bossi is in government and is the country's fastest-growing party.

In Germany, meanwhile, where the extreme right has failed to make inroads, the political sensation of the summer has been the taboo-busting, bestselling book by Thilo Sarazzin, a former Berlin central banker.

He claims that the country is digging its own grave by admitting waves of immigrants he characterises as spongers, welfare cheats, and sub-intelligent beings copulating their way from ethnic minority to takeover majority.

Against this troubled background, Sweden has long seemed aloof and immune, an oasis of civility and openness, with the most generous welfare, asylum, and immigration policies in Europe. But with about 100,000 immigrants entering a country of almost 9 million every year, Åkesson's breakthrough suggests there has been a shift in the public mood.

"We will not get as tough on immigration as Denmark, Norway or the Netherlands," said Prof Jan Ekberg, a national expert on the economics of migration at Linnaeus University. "But the Sweden Democrats will increase their vote if we don't succeed in our immigration policy. That's the main issue."

In Malmo, where about 80,000 of the 300,000 population are immigrants, the limits of Swedish openness are being tested. "It's a very divided city," said Daniel Sandström, editor of the main city paper, Sydsvenskan. "It's made a successful transition from being an old industrial city to a new, postmodern place of middle-class consumers. That means winners and losers. The losers are the old, the poor, and the immigrants."

Teaching 21 seven-year-olds in a primary school in the immigrant "ghetto", Cecilia Hallström is the sole native Swede in the well-equipped classroom.

"Of course, the school is open to everyone, but it is only Muslims who come here," she said. The children, taught in Swedish, are native Arabic, Pashtun, Kurdish and Bosnian speakers of a dozen nationalities. Hallström is a firm supporter of multiculturalism, but noted: "People are just getting fed up. The far right is not new here, but it is gaining ground. We've taken in so many new immigrants that people are saying we need to slow down and take proper care of the ones that are here."

Signs of friction and trouble are not hard to find beneath the veneer of Scandinavian order, decency and prosperity. Beyzat Becirov points to the window in his office at Malmo's main mosque.

A bullet perforated the reinforced glass earlier this year, shaved the neck of a colleague and lodged itself in the drawer of a desk. "We've got to defeat all fascism," said the imam and head of Malmo's 60,000-strong Islamic community. "But you get it on both sides, on our side as well." His mosque is the oldest and biggest in Sweden. It has been burned down once, and a pig was placed in the prayer hall. Becirov said there had been 300 attacks since it was built in 1983. There have been riots. There are no-go areas.

Two things were new in Malmo, said Becirov. Recent years had brought a flood of people "from Asia, Africa, and Arab countries. There's a problem with the Somalis, the Lebanese, the Palestinians. They have difficulty integrating. And there's no jobs." The other novelty was the local rise of the Sweden Democrats, who Becirov described as the "new Nazis", suggesting that the country was joining the European club. "It's a bit like a tsunami spreading across Europe. And now it's here, too."

In Denmark and Germany, France and Italy, the Netherlands and Switzerland, politicians, pundits and publics are immersed in noisy argument about values and loyalties, the end of multiculturalism, the integration failures of foreigners. It's a backlash against mass immigration. Sweden has seemed oblivious to the tumult while keeping its doors open. But that seemed to shift on Sunday, not least in Malmo and its hinterland where Åkesson, announcing that Muslim immigration is the biggest threat to Sweden since Adolf Hitler, scored double-digit results across the south-west.

That Sweden is moving into the European mainstream in its attitudes to immigration is a contested and controversial point that seems to cut to the core of Swedes' ideas of themselves.

Pia Kjaersgaard, leader of the far-right Danish People's party just across the stunning Oeresund road and rail bridge linking Malmo to Copenhagen, gleefully welcomed the election result and the Åkesson breakthrough by declaring: "Sweden is becoming a normal country." That touched a nerve because Sweden and Denmark have opposing immigration policies, with the Danes practising what may be the most restrictive regime in Europe.

"Åkesson puts Sweden and intolerance together. But the true situation and tradition here is of internationalism and tolerance," said Sandström.

Jörgen Grubb, one of Akesson's seven councillors in Malmo, thinks talk of Swedish specialness is rank hypocrisy. "We've always tried to be the perfect country, telling the world we're so good and nice to everyone. But we've just been hiding and now it's changing. We've become less naïve."

Åkesson's appeal is one of nostalgia for a bygone era, the stiff conservatism and tradition of the white Sweden of the 1950s. The test of the rebellion's impact will be whether, as everywhere else in Europe, the mainstream parties try to co-opt Åkesson's voters by accommodating some of his policies.

Lena Westerlund, chief economist at the national trades union association, does not expect any major policy changes on immigration. "I'm not saying it's not problematic, but for our economy the immigration is a net benefit. We have a very bad demographic, we need a much younger population."

Prof Ekberg also does not expect any big policy change. "The problem is not immigration, it is integration, especially in the labour market. If there are no jobs, the consequences are segregation, housing problems and divided cities."

It is in the post-industrial cities of Europe, once centre-left citadels, that the far right has been making big gains – Le Pen in Marseille, Wilders in Rotterdam, Strache in "red" Vienna. Åkesson in Malmo is new, but part of a trend.

"He is a clever populist, careful not to cross the line and say anything that seems undemocratic. But his party has a tremendous acceptance of racism," said Sandström. "And Sweden is turning into a more European country, while Swedes still want to be some kind of an exception. That's the debate that will be taking place here for years now."

At the extremes

France The National Front's hard line on immigration plays well with some voters. Commentators say President Nicolas Sarkozy has shifted further right to capture these votes.

Netherlands Geert Wilders, leader of Freedom Party, is in negotiations to form a coalition government.

Austria The Freedom Party has become a political force and Barbara Rosenkranz, who says anti-Nazi laws should be abolished, came second in presidential race.

Hungary Jobbik party entered parliament in April 2010.

Italy Northern League used a poster of white sheep kicking out a black one to convey anti-immigration message. Swiss People's party, too, has used such a poster image.

Jason Rodrigues