Volendam is a village of clogs, canals, cheese – and anger. A former fishing village-turned-tourist-haven north-east of Amsterdam on the Markermeer lake, it offered one of the country’s strongest turnouts for far-right populist Geert Wilders the last time the country went to the polls.

Wilders was found guilty of inciting discrimination at a rally where he called for “fewer Moroccans”. His supporters in this overwhelmingly white, conservative town see the trial and verdict as political persecution of a maverick anti-establishment champion.

“We don’t like what the government does so we support him,” said Wim Keizer, curator of the Volendam museum, a small building filled with tableaux of families and fishermen in traditional dress, including a dog-drawn cart and the cabin of a North Sea fishing skiff.

Wilders’ Freedom party (PVV) has risen from being a rightwing gadfly of the Dutch establishment to one of the most powerful forces in national politics, remaking the image of a nation once regarded as a beacon of liberal values. It is currently leading in polls ahead of national elections next year.

Facebook Twitter Pinterest Wilders has remained defiant since his conviction. Photograph: AP

“They don’t listen to us,” says Cornelius Cas, a 72-year-old former fisherman who is running errands in clogs and wool pantaloons. “In March, we must vote and, in the past, whoever we choose, every time it is the same, and so we will vote for Mr Wilders.”

Wilders has risen to prominence by championing a brand of far-right populism pioneered in the Netherlands over two decades ago, which is now winning voters across Europe.

Ditching the homophobia, anti-semitism and religious conservatism of traditional far-right groups, its leaders claim instead to defend liberal values against a new enemy: Islam. More recently, they have also capitalised on resentment of Brussels in places like Volendam, where fishing quotas draw more anger than immigration.

The PVV’s appeal to liberal values has drawn in voters from groups who traditionally would have worried about being victims of fringe groups, rather than supporters of them, including Jews and homosexuals. Yet the pitch rings hollow to critics like human rights lawyer Nadia Benaissa, who works with victims of abuse.

“One of the main arguments they use are that Islamic women are being oppressed and yet these same women are overwhelmingly the target of attacks,” she said. “They are mostly perpetrated by white men, though lately also by white women, stating that they should take their veils off, that they don’t belong here.”

And although Wilders denies being a racist, his rise has coincided with a disturbing increase in hate crimes, data from the Anne Frank museum’s annual report shows.

Willem Wagenaar, who works in the museum’s education department, tackling hate speech and abuse across society, says there was a threefold rise in Islamophobic incidents last year. That outpaces any other increase in hate crimes recorded since data was first collected, in the 1990s, and there has also been a rise in active involvement in far-right action groups. The change has been so marked, he said, that he even fears something has changed in the national psyche: “Since the second world war, [the Netherlands has had) a tradition of society opposing extremist views and groups. Even if people found that those groups had ideas they could share, they didn’t want the groups themselves to get involved: they were clear they are the ‘bad guys’.

“In my opinion, in the past year and in the last quarter of 2015... I am pretty much convinced that something changed.”

At the time there was fierce discussion raging about Europe’s refugee crisis and, for the first time, he said, local groups protesting against immigration were working closely with extremists. That has since halted, but he fears that that period marked a profound and potentially dangerous shift: “I am not sure how this will develop: it was only for a short period. But in that period, something which had not happened for decades was suddenly feasible.”

Facebook Twitter Pinterest Pro-Islam protestors outside a press conference held by Wilders. Photograph: Graeme Robertson/The Guardian

Few people seem to think that Wilders has a real chance of leading the country, even if he does manage to hold on to his polling lead and come out top in elections next March. The country’s system of proportional representation means that he would need to form a coalition government, and the other parties have vowed they will not rule with him.

“Wilders may win the election but he’s unlikely to govern and even less likely to become prime minister. It’s easy to break through but hard to amass much power, the opposite of a system like the US,” said Matthijs Rooduijn, a political sociologist at Utrecht University. But if Wilders claims a majority and is still excluded from power, he may be able to turn even that to his advantage, as a populist claiming to stand for the people against an unaccountable elite.

A coalition formed without the leading party would provide strong ammunition, and some scholars fear that a man who started out as a committed democrat, albeit far to the right of most in the Netherlands, is now flirting with much more damaging ideas.

“One of the troubling things about Wilders since 2012 is that he has slowly become more marginalised, and responded to that by becoming more extreme,” said Cas Mudde, a Dutch political scientist.

“He has said that the Netherlands is not democratic if he is not in the next government, called for a revolt if he is kept out. It’s vague – not illegal – but it’s not going the right way.”

The recent trial exemplified the challenge for those trying fight Wilders. Now he has been convicted he can present himself as a martyr to corrupt elites. Had he been cleared, he would have claimed victory.

But despite the boost to his profile, lawyer Benaissa says prosecuting Wilders was vital to show the law can defend victims as abuse cases rise.

“We feel people are starting to think it’s normal, almost like it’s something they feel they have to accept, when the law is clear that they do not,” said Benaissa, adding that she fears greater abuse is going unreported.

“We definitely feel that we don’t hear everything that is going on, like the tip of the iceberg. Every Muslim is someone, or knows someone, who has been attacked, but not everyone reports it to a hotline, and even fewer report it to the police,” she said.

Other politicians fret about how to take on a populist who thrives on condemnation, but has become too dangerous to ignore. “He’s a political pyromaniac, fanning the flames of hatred, and it’s very hard to douse that just with words,” warns MP Sjoerd Sjoerdsma, from the leftwing D66 party which, like many opposition parties, is struggling with the challenge of how to take on a man who delights in controversy and is often bolstered by the publicity his incendiary language generates.

“What we need is for people in the Netherlands to wake up... We ridiculed him for many years, but now we see what happens if you don’t oppose the guy,” said Sjoerdsma.

At some point, however, Wilders may run up against the limits of his own party. Concerned about the infighting and bizarre characters that far-right parties have historically attracted in the Netherlands, he decided to impose discipline by making it absolute. Officially, he is the only party member.

Wilders’ members of parliament and local government rule in association with him so they can be evicted if they cross him, and there are no party gatherings which could disintegrate into the embarrassing chaos that has tarred other far-right groups.

“He is actually quite anti-democratic. Freedom of speech is for him and no one else,” said John van der Pauw, Labour councillor in another bastion of Wilders support, the gritty town of Almere. The newest town in the Netherlands, it has a large ethnic minority population and incomes are lower-than average.

This is one of just two towns where Wilders has contested local council seats, and the Freedom party has taken voters from across the political spectrum to become the largest single party.

But der Pauw is sanguine, at least, about how far Wilders can rise in a system based on coalitions, after watching his local officials struggle to achieve any kind of compromise.

“They act as if they are the only people in Holland who know what is right. They can’t listen to others,” he said. “I am not afraid of Mr Wilders as prime minister, because he would have to co-operate with other parties and he will never manage that. So he will never lead Holland.”

• This article was amended on 11 December 2016 to correct the spellings of Markermeer lake and Matthijs Rooduijn.