Gaetano Saya’s staccato voice rises to a near-hysterical pitch as he points skywards, jabbing his finger in the direction of four giant marble eagles with outspread wings that tower above the semicircular porticoes of Rome’s Piazza della Repubblica. “Look! There they are — symbols of the mighty Roman Empire. They are everywhere!”

Saya is almost spitting with rage as he speaks. For most of the time that we sit in the sweltering summer heat, sipping espressos in a bar tucked under the arches of the busy piazza, he maintains his composure. But when it comes to discussing the uproar caused by the insignia chosen for the recently formed patrol units of his revived neo-fascist party — which include the imperial eagle once worn by Musso-lini’s Blackshirts, the camicie nere — he can barely contain his fury. “The eagles on our badges are Roman, not fascist emblems. If you ban them you would have to tear the eagle off every public building in Italy. They are part of our history. Just as Cromwell is part of yours,” he rants, stroking his clipped moustache.

For the first time since the second world war, Rome is now run by a right-wing mayor. Gianni Alemanno is not only right-wing, but a former neo-fascist street protestor, whose supporters flashed fascist salutes at his victory rally. Alemmano was swept into office in spring last year in the wake of national hysteria following the brutal murder in Rome of an Italian naval officer’s wife by a Romanian Roma gypsy. Her attacker stole the few coins in her purse, attempted to assault her sexually, then left her for dead as she was returning home along a deserted street in October 2007. The 47-year-old religious education teacher’s face was beaten to such a pulp that police could only describe her as of “indeterminate age” before she died of her injuries.

Following sensationalist coverage of the “Roma beast” responsible for Giovanna Reggiani’s death, vigilante groups sought revenge. Four Romanians begging in the centre of Rome were beaten and stabbed, while immigrant shacks all over Italy were set on fire. Since then the country has found itself in the grip of a growing wave of xenophobia that politicians on the right are ruthlessly exploiting. Extremists such as Saya, with his reinvigorated Italian Social Movement-National Right (MSI-DN) party, are also feeding off the fear of immigrants.

The ultimate beneficiary has been Silvio Berlusconi, the 72-year-old perma-tanned billionaire prime minister. Using the might of his extensive media empire, he quickly declared that his country was in the grip of a “Roma emergency” of criminal activity. Many reports at the time wildly inflated the extent to which immigrants account for crime in Italy, with one leading outlet even suggesting that “all Romanians harbour criminal intent”.

Overall crime figures in Italy have not risen for over a decade, yet more than a third of prisoners are now foreigners. Last year foreigners were charged with 68% of rapes and 32% of thefts.

Concern about immigrant crime levels helped to sweep Berlusconi back into power in April 2008 on a law-and-order ticket. He immediately announced the introduction of a “national security package” that has seen thousands of uniformed soldiers in camouflage combat suits deployed to stand guard on street corners in Italian cities and towns. The package is billed as an attempt to crack down on both crime and illegal immigration, now often depicted as entirely synonymous in Italy, which Berlusconi says should never be allowed to become a “multi-ethnic society”.

With so much attention focused on the bed-hopping antics of the flamboyant premier, this ugly undercurrent of racism has been allowed to spread quietly and insidiously. Berlusconi’s decision to legalise new vigilante patrols is raising particular alarm.

Waving his hands with a flourish of self-satisfaction, Saya boasts that thousands of Italians are now clamouring to join the extreme right-wing vigilante patrols he has called the Guardia Nazionale Italiana, or Italian National Guard, set up by his party in June. When the National Guard unveiled its uniform — military-style black caps bearing the imperial eagle, black gloves, black ties, khaki shirts and armbands with the symbol of the black sun long associated with Nazism — Italian prosecutors immediately launched a judicial enquiry into the group. Both Nazi and fascist symbols have been banned in Italy since after the second world war. But Saya, 52, who has been investigated in the past for inciting racial hatred, is confident that the enquiry will be quietly dropped.

“We are just ardent patriots. How can anyone object to that? We favour ultra-nationalism. We defend our history and we are on the march,” he says. He blames the “millions of foreigners invading Italy” for the economic, social and moral crisis he believes his country now faces. “Mussolini was a great man inspired by a real love of his nation. He was a legitimate leader, not a dictator.”

Saya waves his hand to beckon a young follower who has been hovering nearby. Riccardo Lanza is an eloquent 33-year-old stockbroker, neatly dressed in a suit and striped shirt. The reason the paramilitary uniform of the National Guard is hanging in his wardrobe, he says, is that “Italians are no longer in charge of their own country”. He blames the Russian and Chinese mafias for the “total chaos” in Italy. “They have infiltrated our economy, just as foreigners have taken over our streets. We need to put a stop to this.”

Unlike in many European countries with long colonial pasts, mass immigration is a relatively recent phenomenon in Italy, which traditionally was more used to the steady emigration of its citizens. Waves of immigration — first from eastern bloc countries such as Albania and the former Yugoslavia in the wake of the fall of the Berlin Wall, and more recently from north and sub-Saharan Africa — have seen an estimated 3.5m people coming to live in Italy legally, and another 1.5m illegally, over the past 20 years. The country is left grappling with the fact that it is no longer monocultural. Berlusconi recently complained that his birthplace, Milan, “looks like an African city”.

Political expediency lies behind the creation of vigilante groups. Berlusconi was helped back into power with the backing of the far-right Lega Nord (Northern League), originally founded to lobby for the secession of northern Italy from the rest of the country, but more recently defined by its opposition to mass immigration. Ten years ago it was the Northern League that started organising unofficial anti-crime street patrols in towns and cities throughout the north with large numbers of immigrants. When it became clear that Berlusconi’s newly formed People of Freedom Party (a loose coalition between his former Forza Italia movement and the National Alliance, run by the reformed neo-fascist politician Gianfranco Fini) needed the support of the Northern League, promises were made about security, including the introduction of vigilante patrols. The way to tackle illegal immigration, declared Roberto Maroni, a key Northern League politician and subsequent interior minister, was to “get nasty”.

The security package, introduced in stages over the past 12 months, also includes stringent new rules making illegal immigration a criminal offence punishable by a fine of up to €10,000. Children of illegal immigrants are banned from attending school or receiving health care, and those who knowingly harbour illegal immigrants face up to three years in prison. These measures have been compared by leading academics and writers to Mussolini’s infamous race laws banning Jews from work and education. The Vatican has described them as “of great concern” and “a reason for sadness”.

Even Berlusconi soon appears to have realised that he had gone too far in his support of vigilantism. When groups such as Saya’s National Guard started strutting about in fascist-style uniforms, and violent clashes broke out between an extreme right-wing patrol group and left-wing opponents in the Tuscan resort of Massa in late July, Maroni announced that vigilante groups would have to meet strict criteria before being allowed to start patrolling the streets. Patrols should be of no more than three people, members should not wear military-style uniforms, and they should be armed only with walkie-talkies and mobile phones to alert police to trouble.

But the genie of mob rule had already been let out of the bottle. Nowhere is this more apparent than among the followers of the far-right group at the centre of the violence that erupted over the summer in the small city of Massa.

Massa appears to be a typical Italian seaside resort, with its neat rows of sunbeds and striped umbrellas. But it is perched on the edge of the craggy Apuan mountains and has a proud record of resistance. In the second world war these mountains provided hiding places for scores of partisans. Some of the most notorious atrocities committed in Italy by German SS forces were carried out in the area, including the massacre at Sant’Anna di Stazzema, a small village where 560 civilians, mostly women, children and the elderly, were rounded up and shot and their bodies burnt.

So when Stefano Benedetti spins me a yarn about how the name for the vigilante patrol group he and other right-wing extremists set up in Massa came to him by chance, it is clearly laughable. The group is called Soccorso Sociale e Sicurezza (Social Help and Security), and its initials, SSS, are seen as highly provocative.

Benedetti, a travelling salesman well known for playing fascist anthems on his car stereo and hanging a portrait of Mussolini at home, is the only right-wing city councillor in a municipality controlled by the left.

“People call me a Nazi and a fascist. But I am just doing my civic duty,” he argues, explaining how his SSS patrols began to operate at night earlier this year, touring areas of the city frequented by immigrants, on the lookout for trouble.

“There are too many foreigners in our community and they are turning to crime, stealing cars, breaking into houses, becoming violent.”

When SSS members congregated outside a bar close to where left-wing union members were staging an annual solidarity march on the night of July 25, fighting between the two factions sent tourists scurrying. Three policemen and two demonstrators were admitted to hospital; left-wing protestors staged a sit-in on the high-speed rail link.

As news of the emergence of the SSS started circulating among the small immigrant and Roma communities in and around Massa, local officials reported that foreign-born parents were starting to pull their children out of summer activity programmes. A visit to one ramshackle Roma camp of makeshift huts and caravans scattered along the railway tracks between Massa and the neighbouring town of Carrara soon reveals why. “The Italians have always hated us. But until now they have left us alone most of the time,” said one 23-year-old father of three boys, who would only be identified by his first name, Ercoles. “These patrols say they will make the streets safer. But now we are afraid to let our children out of our sight. We’re afraid if we let them go to local swimming pools or beaches, they will be attacked.”

“Massa has a reputation as the sixth safest city in Italy,” its mayor, Roberto Pucci, explains wearily. “But the way these right-wing patrols operate is to create a false sense of fear, create a perception that there are more problems than there are, then portray themselves as the only ones interested in and capable of solving them.

“We are a young democracy, and what is happening here should be taken seriously,” Pucci concludes. “It is not a pleasant situation.”

Pucci has now banned the SSS from operating in Massa, and many left-wing municipalities throughout Italy are expected to follow suit. But Benedetti and his followers vow they will resume their patrols. “They have forbidden the SSS from operating. So we will just change our name and reform as a different organisation,” says one supporter. “What we are doing is within the new law. No one can stop us now.”

This defiance is echoed by Gaetano Saya. Although the National Guard has delayed starting its vigilante patrols as a result of the judicial investigation, he says they will circumvent the rules banning uniforms by reclassifying themselves as a “party militia”.

“The guard will become the operational arm of our party, accompanying our politicians wherever they choose to go on the streets. That they can’t stop,” says Saya, who claims to have the backing of a group of rich industrialists who funded a surveillance helicopter the group recently bought.

The prospect of vigilante patrols mutating into political militias, as existed under Mussolini, has many Italians alarmed, especially in the wake of government measures such as the decision to fingerprint the country’s entire population of 150,000 Roma gypsies, some of whose families have been in Italy since the Middle Ages. The fingerprinting programme quickly got under way in some cities, but has since been watered down to exclude children, following human-rights protests. But such programmes have already had a desensitising effect. The bodies of two young Roma sisters, who drowned while swimming off a Naples beach in the summer of 2008, were left draped in towels for hours on the sand as bathers carried on picnicking and playing Frisbee.

In Padua, heartland of the Northern League, local authorities erected a three-metre-high steel barricade around an immigrant community held responsible for bringing prostitution and drug-dealing to the area. The barrier has since been removed, but in the nearby city of Ardo the mayor posted a bounty of €500 for anyone turning in an illegal immigrant. In some areas of the north, where vigilante patrols are now expected to flourish, the Northern League has also proposed that kebab shops and Chinese restaurants be banned from city centres because they are deemed “incompatible with the historical context”.

In recent years many Italians have felt uncomfortable about the proliferation of prostitutes from eastern Europe and Africa plying their trade openly in streets across the country. And the rise in organised crime and gang violence has had a wider effect. Earlier this year anti-immigrant feeling flared in Rome after a 21-year-old Italian woman was gang-raped and her boyfriend brutally beaten by a group of five Romanians.

But with the country’s plummeting birth rate and ageing population, many parts of the economy would find it hard to survive without foreign workers. Last year a government report on immigrant relations showed that 42% of Italians recognise that immigrants are essential to the economy. But this has not prevented a series of vicious attacks on foreigners in the past 12 months. These include a homeless 35-year-old Indian being beaten and set on fire at a seaside town near Rome last February, and before that an immigrant from Burkino Faso being beaten to death with an iron bar by a Milan shopkeeper who claimed he had stolen a packet of biscuits.

Marco Rovelli, an academic from Massa who has written about Italian immigration, attributes the emergence of vigilantism and the success of political movements like the Northern League in fostering xenophobia to the country’s own history as a poor nation of emigrants until the middle of the last century. “When Italians see foreigners living in the sort of poverty they have only relatively recently left behind, they feel afraid. For some it is a painful reminder of their own past and makes them wary of losing the prosperity they have achieved.”

Beneath the government’s manipulation of national insecurity lies another agenda, warns a fellow academic. James Walston is professor of international relations at the American University of Rome. “By focusing attention on immigrants — and that’s the intention of the vigilante patrols, though it is never said — and creating a feeling that the streets of Italy are unsafe and blaming foreigners,” he says, “Berlusconi is diverting the spotlight from the real problem in this country.”

The real problem, he believes, is organised crime and the mafia. “But any mention of the mafia has largely fallen off the agenda, partly because of the prime minister’s own links with it.” Walston cites the conviction of Marcello Dell’Utri, one of Berlusconi’s closest advisers, on charges of conspiracy with the Sicilian mafia.

In large parts of Italy a significant proportion of the population still pays protection money to local mafia groups every day. Some fear that, in the south particularly, vigilante patrols will soon fall under the control of the mafia, consolidating their hold and leading to more bloodshed.

Last September a hit squad of the notorious Casalesi clan gunned down six West Africans near Naples in a turf war over prostitution and drug-dealing. Several months before that, thugs of the Camorra clan unleashed an orgy of violence against Roma camps in Naples, setting fire to caravans, beating up occupants and driving them from their homes after rumours circulated that a baby girl had been abducted by a gypsy woman. The response of the government’s interior minister, Maroni, was simply to shrug and say: “That is what happens when gypsies steal babies.”

Little wonder, then, that the Italian judiciary — condemned by Berlusconi in the past as a “cancer on society” — and police unions are very critical of the premier’s new security package, including the legalisation of vigilante patrols, for “creating confusion” and diverting resources from official law-enforcement agencies.

Patrols approved by local municipalities will also be entitled to limited funding. The police say that exactly where this money ends up will be hard to track — as a meeting with two burly vigilantes in Milan soon confirms.

Vincenzo Scavo does not bother to introduce me to his heavily muscled associate, whose mobile phone rings constantly with the theme tune from The Godfather. Scavo is too busy complaining.

Until the beginning of July he ran a group in Milan called the Blue Berets that was paid more than half a million euros to conduct anti-crime street patrols in city trouble spots such as the railway station and the Metro system. This was until it was discovered that Scavo held a membership card for the neo-fascist MSI-DN party run by Gaetano Saya. The contract was suspended and Milan’s mayor immediately ordered an investigation into the Blue Berets.

Scavo, a tattooed private-security guard who is originally from Sicily, explains in hurt tones that the only reason he had a party membership card was because he had been contacted several years before to provide private security for the party. He was never hired and claims he had no contact with the party after that.

“For this our good work, our mission, has been stopped,” he complains. The contract, he insists, was only part of the work of the Blue Berets. “We also had volunteers running shopping errands for the elderly in marginal areas of the city, near gypsy camps and immigrant communities where Italians are afraid to walk the streets. Now our citizens will face danger again and live in fear of foreigners.”

Take a walk in some of the areas Scavo identifies as trouble spots, such as Via Padova to the northeast of Milan’s city centre, and it becomes clear that it is the immigrants who are afraid. “A lot of people in these patrols are just racists who use them as an excuse to be abusive to foreigners,” says 39-year-old Isabel Ceveño from Ecuador, who has lived in Italy for 13 years.

Many immigrants I approached in this area with a group called the City Angels, a humanitarian organisation that helps the homeless, no longer dare voice their real concerns. “They used to speak openly to us. But now they are far more cautious. Some think we are part of these new vigilante patrols,” says Mario Furlan, the founder of City Angels. “Whereas we go on the streets to look for people to help, the classic vigilante is someone who goes out looking for an enemy.”

“The patrols are just going to create more agitation on the streets,” says Jona Qamo, a 27-year-old from Albania. “Wouldn’t it be better to help immigrants fit in rather than spy on them?”

Qamo has a point. The attitude of the Italian authorities at all levels has been to assume that people would just muddle through and accept immigrants in their midst because Italians traditionally have a laid-back attitude to life.

“But the presumption of Italian tolerance is not enough,” says Walston, “when you have between 5 and 10% of the population made up of foreigners.” What is needed, he argues, is “real leadership” in promoting integration. “But that is the opposite of what is happening.”

Jean Leonard Touadi, born in the Republic of Congo and now Italy’s first black MP from sub-Saharan Africa says: “It is very hard for Italians to admit they are racist, since they don’t associate themselves with that part of Europe with a long colonial history.”

Touadi has lived in Italy for three decades and has seen a marked rise in racism in recent years. “You can’t say we are living in a fascist regime. But some of what is happening now is very dangerous. With all the problems this country has, not least with the mafia, to single out immigrants as the top priority for law enforcement and throw them to the mercy of vigilantes is clearly just making them scapegoats.”