Neo-Nazi terrorists have continued to operate and recruit in Britain for more than two years after the government banned their organisation, it can be revealed.

In December 2016 National Action became the first far-right group to be proscribed as a terrorist organisation since the Second World War, but its members formed new groups under different names to continue efforts to inspire a race war.

While the ban allowed members to be arrested and jailed under terror laws, court cases heard how the group merely “shed one skin for another” by splitting into regional factions that would dodge the ban.

While two aliases – Scottish Dawn and NS131 – were subsequently proscribed after media reports of their links to National Action, other factions continued to operate.

The Independent understands that police and the Home Office are discussing whether to ban the terrorist group’s remaining factions, amid intensified efforts to combat far-right extremism.

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One is the System Resistance Network, which was found to be recruiting new members in Wales last year.

Infighting caused a further split that created another neo-Nazi group.

Matthew Collins, a researcher with Hope Not Hate, said the most active National Action faction is the Scottish Nationalist Society.

Repeating its predecessor’s tactics, the group has targeted universities and city centres with racist stickers directing people to a website describing members as “ultra-nationalists who want to protect the progression of our people”.

Mr Collins, who a former member of the neo-Nazi group Combat 18, said former National Action members were now “operating under a lot of different names”.

“Banning National Action would have worked if police had drilled down into the group rather than believing they would disappear,” he added.

“They just kept going on and on ... there is a newer breed of groups, of which there are probably three or four.

“We don’t know them all, we don’t know who’s in them because they’re still getting new recruits.”

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All factions have continued spreading National Action’s ideology, which a former member described as the aim to achieve a “white Britain by any means necessary”, eradicating Jews, ethnic minorities and LGBT+ people.

Several National Action members have been prosecuted for membership of a banned group, which is punishable by up to 10 years in prison.

But the law only covers National Action, Scottish Dawn and NS131, allowing members to continue their operations under a series of different names – a technique used prolifically by Anjem Choudary’s network of Islamists.

The cross-government Proscription Review Group must recommend further bans, which must then be approved by parliament before coming into force.

Mr Collins said that while National Action, which was founded by two students in 2013, progressively became more dangerous, its successors are “picking up where it finished”.

“They start even darker, mysterious and [more] sophisticated than National Action did,” he warned. “They begin life as wannabe terrorists.”

Police have vowed to combat National Action and other right-wing extremists, but were caught out by a terror plot mounted by a neo-Nazi in 2017.

Jack Renshaw’s plan to behead a Labour MP was not known to police until his fellow National Action member Robbie Mullen alerted Hope Not Hate.

They were part of a faction based in northwest England and headed by Christopher Lythgoe, who became the group’s national leader after the 2016 ban.

One of the posters used by neo-Nazi group the Scottish Nationalist Society

Their trial heard that National Action were aware of impending proscription and planned to operate under new names.

“The substance of NA is the people, our talents, the bonds between us, our ideas, and our sustained force of will,” he told regional leaders in an email four days before the ban.

“All of that will continue into the future. We’re just shedding one skin for another. All genuinely revolutionary movements in the past have needed to exist partly underground. These are exciting times.”

Speaking at Renshaw’s trial in February, prosecutor Duncan Atkinson QC said: “It is clear that whilst National Action may have used other names since proscription as the flimsiest of camouflage, or limited their activities to those which were less likely to attract the attention of the authorities, the characteristics of the group have continued – by reference to its ideology, its mode of operation, for example the targeting of the young, and its strategy.”

Following the imprisonment of a neo-Nazi who was recruiting for National Action inside the British army, a senior police officer said “painstaking work” took place across the country to understand the threat it posed.

DCS Matt Ward, head of the West Midlands Counter Terrorism Unit, predicted that members “on the periphery will take on leadership roles” and appealed for public vigilance.

“Where there are new cells, we will intercept and prosecute them,” he vowed.

Police efforts are being boosted by the involvement of MI5, which has been brought into investigations previously classed as “domestic extremism” following the 2017 Finsbury Park attack and murder of Jo Cox.

A Home Office spokesperson said: “Our counterterrorism strategy, Contest, addresses all forms of terrorism and no individual or group is free to spread hate or incite violence.