FRANKFURT: Germany`s domestic intelligence service on Friday designated the rising far-right party Af D as an extremist group, handing authorities greater powers to monitor it and fuelling calls for it to be banned.

The anti-immigration Alternative for Germany (AfD) swiftly slammed the move as a `heavy blow` to democracy, just months after they won second place in national polls, and vowed to mount a legal challenge.

The BfV domestic intelligence agency, which had already designated several local Af D branches as rightwing extremist groups, said it decided to give the entire party the label due to its attempts to `undermine the free, democratic` order in Germany.

It cited in particular the `xenophobic, anti-minority, Islamophobic and anti-Muslim statements made by leading party officials`. The classification gives authorities greater powers to monitor the party by lowering the barriers for such steps as intercepting telephone calls and deployingundercover agents.

The new designation also revived calls to ban the party, heightening political tensions in Europe`s top economy where conservative Friedrich Merz is set to take power next Tuesday at the helm of a coalition government with the centre-left SPD.-AFP