A slight smugness is detectable in British reactions to the electoral success of Jörg Haider's Freedom party in Austria. What can you expect of a country that largely welcomed the Anschluss and chose Kurt Waldheim as its president only a few years ago? Couldn't happen here, could it?

Probably not. But it would be dangerously complacent to ignore our home-grown fascists altogether. After years of hibernation, something is stirring in their malodorous lair.

Unnoticed by the national or local media, the veteran British National Party (BNP) leader, John Tyndall was ousted two weeks ago. His victorious challenger, who won 62% of votes in a postal ballot of BNP members, is a smoothiechops Cambridge graduate by the name of Nick Griffin. Whereas Tyndall was an old-fashioned rabble-rouser with a taste for Mosleyite uniforms and Hitlerian rhetoric, Griffin prefers Italian suits or smart-casual wear. He describes himself as a "moderniser" and "new nationalist"; he talks excitedly about the liberating power of the internet; he is as contemptuous of his party's traditional supporters - the skinheads, the football hooligans - as Blairites are of old Labour. He even has his own version of the "third way", having founded a group called the International Third Position. And, like Tony Blair, he believes he can tickle the erogenous zones of Middle England.

In spite of its suave appearance, I need hardly add, new nationalism is just as thuggish and poisonous as the old variety. Griffin's campaign manager, Tony "the bomber" Lecomber, was jailed for three years in 1986 for possessing explosives, and earned another three-year sentence in 1991 for stabbing a Jewish schoolteacher. Seventeen months ago Griffin himself was convicted of incitement to racial hatred after police seized copies of his magazine, the Rune. His main defence witness at the trial was Robert Faurisson, the famous Holocaust revisionist. In a 1995 article from the Rune, Griffin argued that the BNP should be "a strong, disciplined organisation with the ability to back up its slogan 'Defend Rights For Whites' with well-directed boots and fists."

All this has been airbrushed out of his CV lest it frighten Middle England. "It is at this point," Griffin now argues, "when the British National Party suddenly becomes the focus of the hopes not just of the neglected and oppressed white working class, but also of the frustrated and disorientated traditional middle class that our future lies." BNP members have already begun attending rallies of foxhunters and farmers to chat up rural malcontents. But the most promising source of recruits, Griffin believes, is the anti-European campaign.

Now you may think that William Hague has cornered that particular market. However, unless or until Hague actually advocates outright withdrawal from the EU, there will be a sizeable minority of voters who find even the Tories' Europhobia too moderate for their taste. The UK Independence Party (UKIP), which probably has no more actual members than the BNP, won three seats in the European Parliament this year.

Since that triumph, however, UKIP has been falling to pieces with startling speed. The national executive recently passed a motion of no confidence in its leader, Michael Holmes. He then staged a counter-coup at the party's annual conference in Solihull two weeks ago, which led to the sacking of the entire executive and the closure of the London HQ.

These shenanigans have been observed with great interest by Nick Griffin and the BNP. Until 1997, under the leadership of Dr Alan Sked, UKIP's membership form included a clause stressing that racists were not allowed to join. Soon after Sked's departure, however, the clause mysteriously disappeared. The new leaders, Michael Holmes and Nigel Farage - who are now both MEPs - also set out to "combine our protest" with other anti-Euro campaigners. In his UKIP election leaflet this year, Holmes paid tribute to "citizens' patriotic protest groups" such as Save Our Sterling - presumably unaware that Save Our Sterling was run by the BNP.

Then came the most disturbing titbit of all: a blurred photo, taken in the summer of 1997, showing Nigel Farage of UKIP chatting to two men. One was Tony "the bomber" Lecomber, the other was Mark Deavin, head of research for the BNP, who had briefly infiltrated UKIP but was expelled in May 1997 after his true affiliations were discovered.

Deavin, who edited Mindbenders, an "expose" of Jews in the media, is also the author of The Grand Plan: The Origins of Non-White Immigration, in which he argues that "the mass immigration of non-Europeans into every White country on earth" had been engineered by "a homogeneous transatlantic political and financial elite to destroy the national identities and create a raceless new world order." Homogeneous, eh? Allow Deavin to explain: "These concerns were Jewish in origin... the promotion of World Government can also be seen to be in line with traditional Jewish messianic thinking."

When the photo was sent anonymously to the UKIP a few months ago, Farage expressed bafflement. While admitting that "I briefly met Mr Deavin at his request on June 17 1997, and had lunch with him in a restaurant," he insisted that "I have no recollection of ever meeting or speaking to Mr Lecomber in my life... I can only surmise that Mr Lecomber was planted outside the restaurant or that the photograph has been doctored."

Whatever the explanation, the fact that Farage met Deavin after the BNP man's expulsion was enough to alarm some UKIP members - especially as Farage, who earns his living as a City commodity-broker, is a man who often used words such as "nigger" and "nig-nog" in the pub after committee meetings. A month after the lunch, by an odd coincidence, Deavin wrote an article in the far-right journal Spearhead which discussed the possibility of closer relations between the BNP and UKIP.

But here's an even stranger coincidence. Shortly before the 1997 general election, Mark Deavin spoke freely of his plans to undercover researchers from Searchlight magazine and The Cook Report, who had posed as emissaries from Jean-Marie Le Pen's Front National. One necessary step, he said, was to get rid of the BNP leader John Tyndall ("who is actually an obstacle") and replace him with Deavin's chum Nick Griffin. This would leave one other obstacle. "If Blair becomes prime minister," Deavin predicted, "the BNP will be the official opposition in the inner cities, in working-class areas. The UKIP will be the opposition in the shires, the county areas, the middle-class opposition. That party is a serious opposition to us in middle England, but, if we had the resources, we could tear it to pieces."

Two weeks ago, at the same time as UKIP was tearing itself apart in Solihull, Nick Griffin duly toppled John Tyndall and promised a "realignment" of the far-right. He may not yet have the popular appeal of Jörg Haider; but he certainly needs watching.

A spoonful of Mandy

I had expected a storm of fire and brimstone from Ian Paisley when Peter Mandelson's appointment was announced, but the founder of the Save Ulster From Sodomy campaign has been uncharacteristically restrained. Yesterday's "verse of the day" on his official website (www.ianpaisley.org) was a cheerful little number from Romans 13:11: "For now is our salvation nearer..." The same chapter of Romans advises that "he is the minister of God to thee for good... for this cause pay ye tribute." What on earth is Paisley trying to tell us?

An equally puzzling tribute comes from Carmel Hanna of the SDLP, the Assembly member for South Belfast. Praising Mandy's talents as a "doer" and "problem-solver", she told the BBC that "Peter Mandelson has political skills of the highest order - he makes Machiavelli look like Mary Poppins."

Eh? Mary Poppins would surely outrank Old Nick in any league table of problem-solvers. On arriving in Belfast, Mandelson must have been tempted to echo her comment when she inspects the children's nursery: "It is rather like a bearpit, isn't it?" But within seconds she has the place sorted out ("Best foot forward! Spit-spot!") thanks to her trick of combining business with pleasure: add a spoonful of sugar to the medicine, and every task you undertake becomes a piece of cake. Even the most cantankerous old bugger in the land, Mr Banks, is eventually won round by her "political skills of the highest order", so I doubt that she would have had much trouble with David Trimble or Gerry Adams.

No doubt Peter Mandelson will have a few sticky moments. Here too Mary Poppins has the solution - "something to say when you don't know what to say," as she puts it. Supercalifragilisticexpialidocious! If you say it loud enough, even Ian Paisley may be forced to listen.