Up to 2,000 supporters for the English Defence League (EDL) group marched on the streets of Newcastle to protest against what they call the 'Islamification' of Britain.
The rally came days after a British soldier was killed on the streets of London with a meat cleaver by two suspects who were reportedly of the Muslim faith.
The march in Newcastle, a city in the north, highlighted growing anti-Muslim sentiment in the UK in the wake of the gory killing.
"This won't be the last of right-wing demonstrations," said Al Jazeera's Peter Sharp, reporting from Newcastle.
Another march by the older far right group, the British National Party, is planned for June 1 near the site of the killing in Woolwich.
"This could be a long, angry summer," said our correspondent. "Leading Muslim clerics are now warning of a violent backlash by right wing extremists after the murder."
Since the murder on Wednesday, assaults on Muslims have reportedly increased ten-fold, including attacks on mosques and racial abuse.
Leading Muslim clerics are now warning of a violent backlash by right wing extremists after the murder
Police have arrested several people in connection with these attacks, which happened in both the south and north of the country.
Meanwhile on Saturday evening, local media reported that police made three more arrests in London in relation to the murder.
Earlier, counterterrorism police questioned a friend of Michael Adebolajo, one of two suspects.
The friend, Abu Nusaybah, was arrested on Friday evening, immediately after he gave a BBC Television interview describing how Adebolajo may have become radicalised and alleging that Britain's security services tried to recruit him.
Police said Nusaybah was wanted on suspicion of involvement in unspecified acts of terrorism.
Nusaybah said Adebolajo became withdrawn after he visited Kenya, where he claimed he had been arrested and then abused both physically and sexually while in jail.
Nusaybah claimed that Britain's domestic spy agency, MI5, approached Adebolajo to recruit him upon his return to Britain about six months ago.
Adebolajo, 28, and Michael Adebowale, 22, are suspected of killing soldier Lee Rigby by hacking his body with knives and a meat cleaver in front of dozens of passersby on Wednesday in the southeast London district, Woolwich.
The horrific scene was recorded on witnesses' cellphones, and a video emerged showing Adebolajo making political statements and warning of more violence as the soldier lay on the ground.
Police shot both men as they arrived minutes after Rigby's slaying. Both suspects remain under armed guard at two London hospitals.
Questions abound over what could have led the two men to attack Rigby, a 25-year-old ceremonial military drummer and machine-gunner who had served in Afghanistan and was off duty when he was walking near his barracks.
Nusaybah's interview offered one possible narrative. He said Adebolajo's behaviour changed after he allegedly suffered abuse at the hands of Kenyan security forces.
"Although that change wasn't necessarily one that became overt, aggressive or anything like that, he became ... less talkative. He wasn't his bubbly self," Nusaybah told the BBC.
He said MI5 agents approached Adebolajo after he returned to Britain and initially asked him if he was willing to act as an informer.
"He was explicit in that he refused to work for them," Nusaybah said.