Extreme right on the march in Europe's most tolerant nation

The anti-Islamist party led by Dutch firebrand Geert Wilders has triumphed in municipal polls in The Netherlands, opening the way for a political breakthrough for the far-right in general elections in June.

Mr Wilders, known for his blond mane and due in London today to show his anti-Islam film in the House of Lords at the invitation of a Ukip peer, has campaigned for an immediate freeze on immigration and a ban on the wearing of Muslim headscarves in public. His Freedom Party was declared the surprise winner yesterday in Almere, a city just east of Amsterdam with a large immigrant population. It came second in The Hague, the only two cities where it chose to participate in the polls.

Wednesday's vote, in which the two main parties in the ruling coalition, the Labour Party (PvdA) and the Christian Democrats (CDA), suffered heavy losses, was the first electoral test since Prime Minister Jan Peter Balkenende's government collapsed last month.

Tensions between the two sides and the recession played into Wilders' hands, while he refused to depart from his uncompromising stance on Muslim immigration or engage in mainstream political debates. If the local results were to translate nationally on 9 June, 46-year-old Wilders, who faces criminal charges for inciting hatred, could emerge as a kingmaker. An opinion poll yesterday also showed that the Freedom Party could take most seats in the national parliament in June.

Many Muslim residents in Almere were deeply shaken by the outcome, which gave the Freedom Party 21.6 per cent of votes. "I will stand here until my toes freeze," said Ayse Bayrak-de Jager, a Muslim student taking part in a silent protest outside the town hall. Her friend, Zaitoon Shah, added: "It's just appalling to think that I might not to be able to go to the library soon."

Kadriye Kacar, a 35-year-old IT student of Turkish origin, said: "I don't normally wear a headscarf but I decided to today as a sign of protest. Others are doing the same, until Wilders leaves. It's terrible. People are looking at us differently today, as if to say 'we won and you're going to leave'."

Celebrating in a rowdy local café late on Wednesday, a beaming Wilders told the city's Muslims not to be afraid "as long as they don't break the law", but he insisted that his party would refuse to go into talks with any parties that did not support his views. "We've always maintained that it would be unthinkable for us to work with them. We can talk about a number of policy issues like education and finance, but upholding the basic rights of all the people living here is non-negotiable," said Labour councillor Alphons Muurlink.

Many shoppers at the local market told Dutch television they felt ashamed for their city. "It's a big black stain, I don't even want to talk about it," said one elderly woman. The Dutch Muslim Party, which failed to gain any seats, said it was "a sad day" for the country. Leader Henny Kreeft said Wilders had traded on "baseless fears".

The collapse of the Dutch government was triggered by a deadlock over whether to keep some Dutch soldiers in Afghanistan after December, when a parliament decision to withdraw from the country comes into effect. The debacle was the last in a series of crises to have plagued the coalition, with the Christian Democrats locking horns with their Labour colleagues over retirement age and budget reform.