Clothing firm Thor Steinar says its shop Brevik is named after a town near Oslo not Anders Behring Breivik

A German clothing company favoured by far-right extremists has provoked outrage after allegedly naming its newest branch after the self-confessed Norwegian mass murderer who killed 77 people last summer.

Thor Steinar, which models itself as a Nordic company and uses the Norwegian flag, has named its shop in the eastern city of Chemnitz as "Brevik" – a name whose similarity to Anders Behring Breivik is too close for coincidence, critics say. The name Brevik hangs prominently in the window of its central store flanked by Norwegian flags.

Breivik, who has been remanded in custody since the killings last summer, has become a hero among neo-Nazis. The company, which is registered in Dubai said the shop had been named after a Norwegian community called Brevik, which lies south-east of Oslo.

Politicians and citizens' groups in Chemnitz are campaigning to have the shop closed down.

Katja Uhlemann, a spokeswoman for Chemnitz council, told Die Welt: "We've already been in touch with the landlord and will take every other necessary step to ensure this shop is closed down as soon as possible."

Sensitivities remain high because Chemnitz is the third-largest city in Saxony, whose state government has been accused of not doing enough to halt the rise of far-right extremism since the fall of the Berlin Wall. In November, a neo-Nazi terror cell, which had killed 10 people and planted nail bombs, was found to have remained at large in nearby Zwickau for 13 years.

Thor Steinar, which markets itself as an outdoor clothing company and has at least 12 stores in Germany, has become a popular label among neo-Nazis. Clothing from the label is banned from being worn in the German Bundestag. The Norwegian government has sought to ban it from using the Norwegian flag in its logo.