Following the revelation last week that MI5 officers had arrested British soldiers suspected of having links with the neo-Nazi Combat 18 group, it has also emerged that the police are concerned about the activities of the Klan, known by the initials "KKK".
The right-wing extremist group has established cells in Scotland, Wales, the English Midlands and east London in the past four years, and has been linked to a number of attacks on Jewish, black and Asian people.
Scotland Yard has confirmed that the group's activities are being monitored.
It is believed that the Klan aims to capitalise on the growth of Scottish and Welsh nationalism - areas it sees as truly white, Celtic and "untainted" with Jewish, black or Asian blood.
Klan membership has grown in strength in Britain since Allan Beshella, a former leader of the movement in the US, moved to south Wales in the late '80s.
American Klan leaders, known as wizards, helped form the British Knights of Ku Klux Klan. Beshella, who has convictions for child abuse and possession of guns, now claims to have recruited 2,800 members in Britain. Locals in the small former coalmining village of Caerau, Mid Glamorgan, have complained of several incidents there since the KKK was set up.
A branch of the Klan in South Wales was observed holding a candlelit procession just before Christmas, although members did not wear their traditional white robes and pointed hoods.
One local man, who has been monitoring KKK activities, said: "The Klan has established a conspiracy of fear here. They are intimidating locals into silence and recruiting youngsters from the dole into a life of violence and racial hatred."
The Klan's interest in Britain's Celtic fringe comes as no surprise, given its roots. Established in the defeated South after the American Civil War, the KKK took its name from the clans of Scotland and uses a highly selective view of Scottish history to support its philosophy.
It is believed that the movement started in the 1860s as a club for Confederate cavalry officers of Scots descent, before evolving into a secret society to inspire terror among freed slaves.
Some Klan rituals are based on those of the secretive Society of the Horseman's Word, once active in north-east Scotland.
In more recent days, the film Braveheart - in which William Wallace, played by Mel Gibson, defeats the English - has become cult viewing among Klansmen.
This has helped the KKK gain a foothold among some Scottish extreme nationalists. Last week Ian Christie, a self-styled Scottish knight of the Ku Klux Klan, was jailed for three months after threatening the Lord Provost of Dundee.
He had sent sinister threats to the civic head after the city council decided to rename a library in honour of President Nelson Mandela.
Referring to Mandela as a "cannibal", the letter claimed the Provost's "doom was sealed".
In England, the KKK has been expanding into areas with a high ethnic minority presence.
A cell was established in Walsall, in the English West Midlands, in January to intimidate the local Asian population.
A burning cross was discovered on a hill near the town and stickers supporting the group were plastered throughout the town centre.
In Rotherhithe, London, groups calling themselves KKK have demanded "lynchings".
Nick Lowles, co-editor of Searchlight magazine, which monitors extremist groups, said the Klan tended to attract some of the more extreme members of the right-wing British National Party.
"Many of the members we have identified are so dangerous that they have been kicked out of the British National Party - itself an organisation that attracts thugs," he said.
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