European countries including Britain face a severe and rising threat from far-right extremists, who are increasingly inclined towards violence, MPs have been warned.

One troubling scenario painted for the Home Affairs Committee was the prospect of far-right groups and Al-Qaeda (AQ) inspired Islamist groups fighting one another on British soil.

Dr Matthew Goodwin from the University of Nottingham told MPs that while membership of the BNP was falling, there had been were disturbing signals from the blogosphere that smaller groups and individuals were gearing up for violence: "On far right blogs there has been a shift towards more provocation, more violence. The far right is becoming far more confrontational and willing to engage in violence.

"The far right has consistently demonstrated a potential for mass violence, but there could be a spiral of violence among different forms of extremism. The far right could go into conflict with an AQ inspired group, and for that to be retaliated. It wouldn't take too long for there to be a spiral of violence."

However Goodwin pointed out that many of the websites organising extremism were outside of UK jurisdiction, and that the authorities needed to work more with internet service providers to track their activity.

MPs were told that Britain currently has 17 men in prison serving time for terrorism offences, and that more research was needed to explore whether the UK's prisons were breeding grounds for radicalisation. Goodwin said that the mass murder by Anders Breivik in Norway in July had prompted a re-assessment of how to identify lone right-wing extremists planning terrorist attacks.

"Breivik was shunned by Norwegian and Swedish far-right groups, there was a sense that he was going too far," he said.

Goodwin's views were supported by evidence from Sir Norman Bettison, who leads for the Association of Chief Police Officers on the government's Prevent strategy, designed to stop people becoming radicalised terrorists.

"The right wing terrorist operates as a lone-wolf, operating under the radar, whereas the Al-Qaeda inspired terrorist operates as part of a supply line," said Bettison. "To apportion the likelihood of threats is a fool's errand. Today, it could be from either end of the spectrum."

He added: "AQ-inspired terrorism has created a set of germs that spread and morph into other things, and they infect the minds and the culture. What is required isn't a new law enforcement effort to defeat those who represent the current threat, but it requires an all-government approach."

Bettison admitted his unit was "in touch" with the EDL when asked, saying: "It has absolutely no effect on ameliorating their behaviour."

Mike Whine from the Community Safety Trust said that while the radicalisation process was quite well understood in terms of websites and public meetings, there was comparatively little research being done on prison radicalisation. He told MPs that across Europe the emerging trend was for far-right organisers to recruit people at rock concerts.

"There are reports of these venues being used to exchange ideas and to plan activity, these have transfered from one country to another," he said.

"In terms of islamist recruitment the internet is very important, universities are important, but when you move on to terrorism you need to have human intervention. Someone has to intervene and say, right, you've been radicalised, let's take you on."