The hardcore racists have vowed to WIPE OUT non-whites and set up a FOURTH REICH, echoing Hitler's evil empire.
Security forces monitoring the underground group and campaigners against racism say the extremists are a REAL danger and must be STOPPED.
The Blood and Honour group - which takes its name from the Hitler Youth slogan - already claims to have branches in 18 countries with 19 cells in Britain alone.
It spreads its chilling ideology through secret meetings, internet messages and broadcasts and white-power CDs.
Followers are incited to "take our country back by force or arms" and told they must "fight or die".
The movement is exposed in a terrifying report by the Centre for Social Cohesion think-tank and the Nothing British group which campaigns against racism. It has handed a 53-page dossier to the police.
Patrick Mercer, MP, chair of the House of Commons anti-terror sub-committee, believes the group must be crushed. He said: "There is no room for complacency. These characters have the potential to inflict a lot of damage and create a lot of fear."
And Baroness Pauline Neville-Jones - Shadow Security Minister and former chair of the Joint Intelligence Committee - has written to Home Secretary Alan Johnson about the group.
She said: "This report suggest Blood and Honour is distributing material which encourages hatred and acts of terror. I'd like to know what action can be taken under the Terrorism Act."
Blood and Honour evolved from the far-right music scene and is more extreme than other far-right organisations, rejecting involvement in the political process as practised by other groups such as the BNP. "We must build an underground cell system of dedicated fighters, trained and fanatical in the beliefs of National Socialism," it states. "As time is running out for the White World we therefore must fight or die."
It glorifies terrorism against minorities and CDs sold by the group include Ovens Again - a sickening reference to the Holocaust.
Album covers show a dead black victim of a mob lynching and piles of dead bodies at a Nazi concentration camp.
An expert witness at his trial said Blood and Honour material played a central role in his radicalisation.
Last year West Yorkshire Chief Constable Sir Norman Bettison warned of "a growing right wing threat" after cops seized hundreds of weapons and bombs from a suspected neo-Nazi cell.
James Bethell, director of Nothing British said: "It is important that we remain vigilant towards people with an ideological commitment to creating violence between people of different races.
"In 2001 security services tracked young Islamist radicals at outward bound camps that seemed harmless at the time.
"Four years later, some of those men had become terrorists who sought to kill innocent civilians on July 7 and 21, 2005.
"We must not make the same mistake again."
the pdf report about Blood & Honour UK can be downloaded by clicking B & H Report
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