The buzz of drills and whine of cranes fill the air as scores of workers in yellow hard hats scuttle around the concrete shell of a building which, even in its unfinished state, dominates the working-class Cologne district of Ehrenfeld. For the thriving local Turkish community, the sprawling complex represents the chance for an entire infrastructure under one roof – from a mosque to a hairdresser's to a travel agency.

But for others in the city the new mosque and cultural centre has provoked fears that the multimillion-euro project will do little to encourage integration and give the Turks free rein to live in their own autonomous world. The right-wing populist Pro Cologne movement has campaigned against the mosque and moved a step closer to its goal last week after joining forces with Austria's far-right Freedom party (FPO).

"Every new movement needs a unique selling point," said Bernd Schöppe, of Pro Cologne. "Ours is the mosque. If ever you needed a sign of the real threat of Islamisation in Germany, it's that mosque, with its huge dome and 55m-high minarets." Pro Cologne, a small but growing movement which recently won seats on the city council, hopes to boost its profile by associating itself with the FPO, which made its name a decade ago after sweeping to power under the leadership of the late extreme-right firebrand Jörg Haider.

This month the FPO was celebrating another feat, after securing 26% of the vote in the Vienna elections. One of its slogans urged Muslims to "go home", and among the election paraphernalia it dished out was a computer game where players score points for shooting at mosques and minarets.

"We share similar views," said Judith Wolter, Pro Cologne's deputy leader. "It's a good partnership. They need us to build a rightwing faction on the European stage ahead of the 2014 EU parliamentary elections, we need them to help us win more voters. We'd be happy to adopt their name."

Her party, she admitted, is working hard to polish its public image, and is fighting through the courts to be removed from the watchlist of Germany's Office for the Protection of the Constitution, which has the movement under surveillance for its anti-foreigner rhetoric.

The timing of the collaboration could hardly be better. Ever since the release this summer of a polemical book by a former finance senator and central banker arguing that Germany is being "dumbed down" by "over-breeding" foreigners, the country has been gripped by a fierce immigration debate that has seen the chancellor, Angela Merkel, enter the fray. Thilo Sarrazin's Deutschland Schafft Sich Ab (Germany is Digging its Own Grave) has sold more than a million copies and led to 20% of Germans saying that they would consider voting for a Sarrazin party.

Rightwing populists, meanwhile, have interpreted it as a direct invitation to them to form a new party. Mindful of this, Merkel has been forced into making comments that smack of desperation to claw back disillusioned voters who think she has moved her Christian Democratic Union (CDU) and its sister party, the Christian Socialist Union (CSU), too far to the left; she recently declared that Germany's attempts at multiculturalism had "utterly failed". The CSU's head, Horst Seehofer, also stoked the fire with his call for a halt to immigration from Turkey and Arab nations.

"The anti-immigration utterings of Sarrazin, backed up by the comments by Merkel and Seehofer, are like a gift to the far right. They have had a door opened to them that has previously been closed, because it is now socially acceptable to say things that before nobody dared to voice," said Alexander Häusler, a social scientist and neo-Nazism expert at Düsseldorf's University of Applied Sciences.

At present, Germany's far right lacks unity and cohesion. But according to Häusler they could reverse that situation with the help of the Austrians under the leadership of the charismatic FPO leader Heinz-Christian Strache.

Häusler described the fact that the push for Germany's far right is coming from the small neighbouring republic of Austria as "history repeating itself as farce".

"Austria's political culture has developed differently from that of Germany's," he said, because Germany underwent a postwar denazification process that Austria was largely spared. "You have been able to say things on the Austrian political stage that would not have been acceptable in Germany," he added.

Nurhan Solkan, general secretary of the Central Council of Muslims, said: "Personally, it scares me. The inhibitions towards voicing your opinion about Muslims are fast breaking down. Nowadays I only need to park my car slightly badly for an old lady to come up to me and shout that I'd better go home to wherever I came from."