Locals in a small east German township stood by as a drunken mob of about 50 youths howling neo-Nazi slogans hunted down eight terrified Indian tourists.

The attack in Mügeln, near Leipzig, was the latest in a series of violent assaults on foreigners in eastern Germany that is beginning to alarm the Government in Berlin.

The inhabitants of Mügeln were celebrating their traditional Old Town street festival on Saturday night when a horde of German youths started to pick a fight with the visiting Indians.

After pushing and shoving them the youths chased them out of a beer tent and pursued them down the narrow streets of the town centre.

The young Indian men took refuge in a pizzeria and tried to barricade the doors with tables.

By the time that the police arrived – about 70 officers – the Germans had smashed their way into the pizzeria. The eight Indians were treated in hospital but have now been released.

The town authorities are still in denial about the reasons for the clash even though witnesses say that the mob was shouting slogans such as “Long live the national resistance!” and “Get out of Germany!”.

“I really don’t know if there is a far-right background to this incident,” Gotthard Deuss, the Mayor, said yesterday. “There are no known right-wing extremists here. This is a town with barely 5,000 inhabitants and everybody knows everybody.”

The regional police chief, Bernd Merbitz, went a little farther, saying: “We are investigating all possible motives, including the possibility that this was an act aimed at foreigners.”

Saturday was a red-letter day for neo-Nazis across Germany – it was when they mark the anniversary of the death in 1987 of Rudolf Hess, Hitler’s deputy as leader of the Nazi party. Mr Deuss had apparently been warned before the celebrations that far-right sympathisers could try to disrupt the festivities.

Ambitious young east Germans increasingly leave their home towns to move to cities in western Germany or elsewhere in Europe in search of jobs.

Those left behind are often frustrated, angry and getting by on social welfare payments. Nationalist groupings, notably the National Party of Germany (NPD), are capitalising on this discontent, gaining a foothold in local councils and regional parliaments and setting up their own training centres.

A survey of 14 to 25-year-olds carried out by the Forsa opinion poll institute found that one out of two youths in eastern Germany now believe that National Socialism had “its good sides”.

Because of the strong grassroots presence of the NPD in Saxony – Mügeln is close to the two major Saxon cities of Leipzig and Dresden – and in Mecklenburg-Pommerania, funding is often made available for youth centres for the far Right.

These in turn are creating a new network of sympathisers who are barely noticed by their neighbours until a flare-up such as occurred at the weekend.

In Wismar, an ancient port in eastern Germany, there are now not only neo-Nazi youth centres but also retail outlets where sympathisers can buy CDs with racist music and neo-Nazi paraphernalia.

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