They turned out in their hundreds despite the snow: grizzled old men in overcoats and thick anoraks. Nearly all of them were in their late eighties and many hobbled on walking sticks. Watched by more than 1,000 blue-uniformed riot police, they brandished red-and-white Latvian national flags and barked out patriotic wartime "warrior songs" that echoed ominously through the narrow streets of Riga's old town.

The march, by some 350 surviving former members of Latvia's Nazi Waffen SS division and more than 2,000 of their supporters, looked like an act of collective octogenarian defiance. In many ways, it was.

Only hours earlier, Efraim Zuroff of the Simon Wiesenthal Centre, the man currently considered to be the world's leading Nazi hunter, had called on Latvia to ban public celebrations marking the country's controversial Legionnaires' Day, calling it an "attempt to rewrite history". He was backed by Jewish groups, Holocaust memorial organisations and by Nils Usakovs, Riga's ethnic Russian Mayor, who insisted: "It is a bit difficult to claim to be a hero if you were fighting for the Nazis." But at the last minute, Riga's district court overturned the ban after judges agreed that a city which last year permitted a controversial gay pride parade could not in all fairness prohibit a march by former Waffen SS men.

Controversy has always surrounded Latvia's so-called Legionnaires' Day. It marks the anniversary of a 1943 battle in which two Latvian divisions of some 30,000 Waffen SS troops inflicted defeat on the Soviet Red Army. This year, however, the occasion has put the spotlight on David Cameron's Conservative Party, which is politically in bed with the event's backers. The Tory leader's decision to remove his party from the centre-right bloc in the European Parliament has realigned the Conservatives with questionable right-wing groups such as Latvia's Fatherland and Freedom party, which helped to organise yesterday's parade.

After an emotional church service held in Riga's 14th-century cathedral, more than 2,000 Nazi veterans and their supporters were allowed to march freely through the snowbound streets of the city. Flanked by hundreds of Latvian flags, they placed flowers and Waffen SS memorabilia at the foot of the city's 1930s-built freedom and fatherland monument, which was erected to celebrate Latvia's post-First World War independence.

A large gang of young ethnic Russians represented the other side. They brandished placards bearing the words "Waffen SS" and the names of Latvian villages where atrocities against Jews were committed by Latvian Waffen SS members during the war. Some 75,000 Jews were murdered in the country during the Nazi occupation. "It is disgraceful that these people should be allowed to march here," said one of them, called Mikhail, in his early thirties. "All the Russians are against it," he insisted.

Riga's inhabitants, who number close to a million, are equally divided between Russians and Latvians. Yet the Russian anti-Waffen SS protesters were in the minority during yesterday's celebrations. In Riga, a capital city that was part of the Soviet Union until 1990, anti-Soviet resentment remains high. "These Waffen SS veterans were fighting for the liberation of Latvia," said one respectable-looking man in his fifties. "They have a right to their celebration."

That view is echoed by 86-year-old Visvaldis Lacis, one of 140,000 Latvians who fought on the German side during the Second World War. Mr Lacis was drafted into the Waffen SS in 1943 and insists he was fighting for an independent Latvia. He points out that Latvians were prohibited from joining the regular German army and were only permitted to serve in Waffen SS "legions".

"The Germans and Russians invaded Latvia for centuries and incorporated us into our empires," he said. "We chose the lesser of two evils because during the German occupation, the Germans killed or deported 18,000 Latvians, whereas the Russians killed or deported 300,000. Were we not right to make such a choice?" he asked.

Many Latvian SS veterans insist that they were not party to atrocities. However, Jewish groups point out that Latvian police were recruited by the Germans and took part in the Holocaust. They were responsible for the mass execution of Jews after the Nazi invasion in 1941. These men later willingly joined the Waffen SS. Historians point out that they were involved in a war against so-called "partisans" which almost certainly involved mass shootings.

"With all my sympathy for the victims of Communism, the crimes of Communism are simply not the same as the Holocaust. Part of this is fuelled by a desire to deflect attention away from the extensive collaboration with the Nazis during the Second World War," Mr Zuroff said. "They thought they were fighting for Latvia but the real beneficiary of these men's service and bravery was Nazi Germany."

The LNNK: Cameron's awkward ally

When David Cameron promised to pull the Conservative Party out of the centre-right coalition that sits in the European Parliament, he may not have expected to find himself in a new grouping with the Fatherland and Freedom party. The Latvian group's celebration of SS veterans is nothing new, but its potential to cause political headaches for Mr Cameron can only increase in an election year.

One of the oldest parties in Latvia, the LNNK, as it is also known, has been represented in parliament since 1993. Its most prominent figure is Juris Dobelis, a Latvian nationalist who commemorates the country's Waffen-SS men every year. To Mr Dobelis, this marks his country's proud resistance against the Russian army; to many foreign critics, it looks like apologism. Foreign Secretary David Miliband has called the Conservatives' connection with the Fatherland and Freedom party "sickening". In reply to that remark, Mr Dobelis last year insisted Mr Miliband was "wrong". "He does not know the history of Latvia," he said.