The German state's attempt to outlaw the nazi "Nationaldemokratische Partei Deutschlands" (NPD) ended in fiasco when the Federal Constitutional Court halted the case because of the mounting scandal surrounding incompetent intelligence gathering by the internal security service, the Verfassungsschutz. Horst Mahler, the nazi lawyer, had fiercely defended the NPD's position.

By winding up the proceedings, in mid-March, the judges in Karlsruhe inflicted a bitter defeat on the three bodies that had applied for the ban: the federal government, the federal parliament and its upper house, the federal council.

The judges emphasised that their ruling did not rule out future proceedings. However, Interior Minister Otto Schily said he regretted their decision, which was wrong, and stressed that there was little chance of another attempt to obtain a ban.

Three of the judges refused to allow the case to continue because of the sheer number of state spies in the NPD's ruling bodies. It seems that there were as many as 20 in the party's national and regional leaderships alone, while others have claimed that one in seven of the NPD's leading officers were state informers. The case could only have gone further with a two-thirds majority of the eight presiding judges.

In the past few years, it has been estimated that about 30 of the 200 members of the NPD leadership stratum were in the pay of the Verfassungsschutz. Even after the ban was applied for, security service informers were still sitting on the NPD's executive committees, the judges pointed out. Such intensive surveillance of a party immediately before and during a prohibition case is, they said, incompatible with legal requirements.

The court also criticised the unsatisfactory, less than diligent, preparation of the case submitted to it at the beginning of 2001, following a big increase in right-wing extremist violence the previous year. After Wolfgang Frenz, 67, a founding member of the NPD, was unmasked as a paid Verfassungsschutz agent, the constitutional court postponed hearings set for February 2002.

The constitutional court does not readily ban legally registered political parties. There are only two precedents in the history of the Federal Republic: the fascist Sozialistische Reichspartei in 1952 and the Communist Party in 1956.

Schily has rejected the three judges' criticisms. The documents setting out the government's case for the ban, he said, did not rely on any of the state's spies, with the exception of Frenz. He dismissed the notion that the acquisition of information by state informers should be a procedural obstacle. He also rejected the suggestion that the state's informers had exerted influence on NPD policy.

The Karlsruhe farce immediately unleashed a wave of reaction from politicians looking for someone to blame. Wolfgang Bosbach, a Christian Democrat MP described the conduct of the case as "dilettantish" while Angelika Beer, the leader of the Green Party, expressed "regret that a procedure to which a constitutional state is entitled for its own protection had failed". The Green parliamentary group still considers the NPD should be banned and has called for a comprehensive structural reform of the secret services.

Guido Westerwelle, the leader of the liberal Free Democrats, called the failure a "legal-political disaster". The FDP parliamentary group opposed the original application for a ban in the German parliament.

Paul Spiegel, president of the Central Council of Jews in Germany, urged the state's constitutional organs to send out a "clear signal for a militant defence of democracy" and emphasised the need for them to do their homework properly in future.

Finally, Michael Sommer, leader of the millions-strong trade union federation, the DGB, warned strongly against playing down the danger of right-wing extremist parties and groups, declaring that "a ban on the NPD would have been an important legal step against the continuously xenophobic climate" in German society.

Politicians in Germany's 17 federal states all expressed concern at the government's failure to wipe the NPD off the political map, as did officials of the police trade union. Independent anti-fascists, however, were not surprised by the Karlsruhe verdict, as they had been highly sceptical about the proceedings from the start.

Anti-fascists consider a strengthening of grass-roots commitment to opposing fascism far more effective than top-down "law and order" methods, not least because it is the responsibility of all people in society to stand up to racism, antisemitism and right-wing extremism. In addition, they can see for themselves that prohibitions of nazi organisations - more than 20 in the past two decades - have had very limited effect. As for the NPD, it now sees itself as politically strengthened and is aiming to make a reappearance in regional parliaments next year, according to its leader, Udo  Voigt. And for May Day it has announced a "victory parade"  in Berlin.

Horst Mahler, nazi lawyer, who claims he is muzzled by the German state