Tea and mugs at the BNP garden party

An English village, a summer festival – what could be more agreeable? But beneath the traditional trappings lies an air of menace.

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A man wearing Islamic dress and an Osama Bin Laden mask poked his head through wooden stocks and was pelted with sponges for his trouble, while a neighbouring stall did a roaring trade in golliwog mugs and Union flag badges. This was not your average summer fete. A bouncy castle and ice-cream van did little to lighten the mood at the British National Party's festival yesterday.

BNP members, huddled under tarpaulin and shivering in their shorts, appeared less than thrilled by the grey Derbyshire skies and chill breeze that heralded the start of their annual summer gathering.

Listed in the Domesday Book, the sleepy village of Codnor in the Amber Valley district is a former mining community, with a population of just under 5,000. Only 12 miles from Derby and 14 from Nottingham, Codnor (chillingly for those who live there) is regarded by the BNP as "the heart of a rural district whose ancient history and cultural heritage exemplify all that is steadfastly and typically Anglo-Saxon".

The "Red, White and Blue" festival was billed as a family event. In this case the "family" extended beyond mum, dad and a couple of sticky-fingered children. One cousin from out of town was missing: a US white supremacist was banned from entering Britain for the festival last week. But others had rallied and speeches were scheduled from Roberto Fiore, leader of the Italian far-right Forza Nuova and a friend of the BNP leader, Nick Griffin.

And, of course, there were members of the BNP "family" from closer to home. "It is nice to speak to people from different countries who share our views," said Dave Clarke, 56, who has attended the event for the past five years. Like many at the festival, Mr Clarke wore his political allegiance on his chest: a T-shirt bearing the St George's Cross and a row of BNP stickers decorating the brim of his hat.

Most who attended yesterday came with their children, and in this Mr Clarke was no exception. He brought his 16-year-old daughter, Rebecca, hoping she would "learn about her culture and heritage, things that are being forgotten".

Along with family, British culture and heritage were high on the agenda. When Mr Griffin picked up the microphone in the "Political Tent", it was not to speak of the party's political future but about researching his family's history. He encouraged others to do the same.

Numerous posters celebrated British soldiers who fought in the First and Second World Wars, while in one corner of the field a group of white wooden crosses commemorated "people who have died as a result of anti-white violence". It was one of many surreal touches in an event that both fascinated and appalled in its apparent normality: a Ford Ka was up for grabs in a raffle, while a coconut shy featured images of Tony Blair, Jack Straw and Gordon Brown, offering festival-goers the chance to "knock a traitor off the stick".

Amid makeshift cafés selling tea and cakes sat marquees run by local BNP branches. At the Manchester stall, "Then and Now" displays contrasted photographs of white 1960s schoolboys with modern schools in the city's multicultural Moss Side area, beside slogans claiming that schools have been "dumbed down" to meet the needs of immigrants.

Media entry was tightly controlled. All but the most like-minded journalists, myself included, were assigned two minders; some publications were denied access altogether.

Things were getting a little ugly on the other side of the iron gates and thick hedgerows – not to mention countless security guards and policemen – that separated BNP members from about 1,500 anti-fascist protesters. The Derbyshire force put the cost of policing this year's protest at some £500,000, and reported a score of arrests as demonstrators hurled missiles, including eggs and flour, in frustration at being unable to get to the BNP members. Many had travelled to Codnor with groups such as Stop the BNP, Unite Against Fascism and the Trades Union Congress.

"We know they have a hardcore neo-Nazi membership, but in holding events like this they are trying to secure new members," said 43-year-old Dean Ryan, from London. "We're here to remind those people that this is not just a fun day out. I'm planning to protest peacefully, but I've seen the BNP be violent and as far as I'm concerned self-defence is no offence."

Snippets of chants from the protesters drifted across the site. Refrains such as "What shall we do with the BNP? What shall we do with the BNP? String them up like Mussolini" created a sense of unease, although the voices were frequently drowned out by the constant whirring of a police helicopter circling overhead.

The BNP professed itself happy with the way the day had turned out. "We've chosen a very secure site here," said Mr Griffin. "We're tucked away, so we're not in people's faces. It is discreet. We haven't done much marketing this year, but I'd say we've got more than last year."

The people who live nearby were considerably less happy. For them, the gathering had been as much of a nuisance as they had predicted. With roads closed and hundreds of protesters chanting, local residents do not look forward to the festival, which has been held in the town for the past three years.

Kevin Grant, 50, who lives less than a mile from the festival site, viewed the whole thing as an irritant: "Last year I was called a neo-Nazi by protesters, and I don't even vote for the BNP. This year we've been told to stay in our houses all day."

Independent