By Madeline Chambers and Ursula Knapp
BERLIN/KARLSRUHE (Reuters) - Germany's Constitutional Court on Tuesday said the far-right National Democratic Party (NPD) resembled Adolf Hitler's Nazi party, but ruled against banning it because it presented no threat to democracy.
Germany's intelligence agency described the NPD as racist and anti-Semitic and the attempt by the country's 16 federal states to outlaw the party came amid rising support for right-wing groups stoked by popular resentment over the influx of migrants.
While the court said the party's aims violated the constitution, it ruled that there was insufficient evidence it would wield power. Under German law there must be hard proof that a party puts democracy at risk for it to be banned.
"The NPD intends to replace the existing constitutional system with an authoritarian national state that adheres to the idea of an ethnically defined 'people's community'," the court said in its ruling.
"However, currently there is a lack of specific and weighty indications suggesting that this endeavour will be successful."
The tough conditions for banning a political party is in part a legacy of the crushing of dissent in the Nazi era and communist East Germany.
Ahead of federal elections in September, the NPD has been largely overshadowed by the anti-immigrant Alternative for Germany (AfD), for whom support has soared to 15 percent in polls, and it has failed to capitalise on the refugee crisis.
The NPD has never won enough support to win seats in the federal parliament and in September lost its last seat in a regional assembly. It is, though, represented on local councils and in 2014 won a seat in the European Parliament.
"It appears to be entirely impossible that the NPD will succeed in achieving its aims by parliamentary or extra-parliamentary democratic means," said the court.
Germany's domestic intelligence agency says the NPD, established in 1964, has about 5,000 members, in a country of 82 million, and links to some violent neo-Nazis.
Several senior NPD figures have been convicted of Holocaust denial or incitement but the party denies any involvement in violence.
"Identification with leading personalities of the (Nazi) party, the use of selected National Socialist vocabulary, texts, songs and symbols, as well as revisionist statements with regard to history demonstrate an affinity ... with the mindset of National Socialism," said the court.
Some politicians argue that allowing the fringe NPD to exist would legitimise it and send a signal that its right-wing views are acceptable. Others say a ban could be counterproductive and push its members underground.
Only two parties have been banned since World War Two - the Socialist Reich Party, a successor to Hitler's Nazis, in 1952, and the Communist Party in 1956 in West Germany.
An earlier attempt to ban the NPD in 2003 collapsed because some of the party officials used as witnesses turned out to be government-paid informants.
(Writing by Madeline Chambers; editing by Richard Lough)