A furious row has flared after it emerged that approval has been granted to the formation of an alliance of seven European extreme right wing political parties.
These include the British National Party (BNP), which had two MEPs elected in the last European elections, the French Front National and Hungary's Jobbik.
The new pan-European grouping, called the "Alliance of European Nationalist Movements", will qualify for a reported €289,266 of EU taxpayers' money.
The AENM may also qualify for more European money next year.
News of the new group emerged on Thursday at parliament's plenary in Strasbourg.
Formal approval for the new group was given at a meeting on Monday by parliament's bureau, which comprises the assembly's president and vice presidents.
Reaction to the news was swift, with UK S&D member Claude Moraes, calling for a 'boycott' of the new group.
He said, "It's a shameful week for democracy in Europe. Let's hope this also will be a rallying cry for anti-fascists throughout the EU to work harder together to stop the pan-European far right."
He said, "There are pan-European alliances of political parties from the centre right Christian Democrats through to the Greens, including the Party of European Socialists which includes the British Labour Party as a member, and we all respect one another's differences and work together.
"I hope that none of the other parties work with this alliance of racists and neo-fascists.
"Two BNP MEPs were elected at the last European elections in 2009 and they are now in a close alliance with the Front National in France, who may achieve success in the French presidential elections in the summer, and Jobbik which has been a government coalition partner in Hungary.
"There are very strict rules about how this political funding can be spent. These include respect for democracy and human rights. We will keep a very close eye to make sure this new grouping stick to the rules.
"This is why we believe this decision is wrong, and we will closely monitor how this neo-fascist grouping spends their money," Moraes said.
The BNP failed to form an alliance of far right MEPs in parliament, but it was decided by the institution that this did not preclude them from forming a pan-European political party.
Further comment came from Edward McMillan-Scott, a vice president of parliament, who said the establishment of the new group gave "cause for real concern".
The UK ALDE deputy added, "I have been tracking the rise of the far right for a few years and in the last European elections we saw the rise of far right parties in ten of member states.
"The formation of this new group is further proof that these groups have been collaborating since that time and will present a joint platform at the next elections in 2014."
The EU Has Polluted the Whole of the Western World; Its about Time Checks and Balances were but in place, others No One will be safe in there Homes wherever we Live.
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