The UK Independence Party has defended its decision to work with members of a Swedish party which was set up by former Nazis.

Ukip MEPs have joined a European Parliament grouping alongside representatives of the Sweden Democrat party, despite the Scandinavian group’s history of extreme nationalism, white supremacy and links to the Waffen SS.

Nigel Farage and his colleagues held their first meeting with the Europe of Freedom and Democracy (EFD) group in Brussels on Tuesday.

The Ukip leader said: “I am very proud to have formed this group and we undertake to be the peoples’ voice. We will be on the front-line working for the restoration of freedom, national democracy and prosperity across Europe."

The Sweden Democrat party was formed in 1988 by activists including Anders Klarström, who had been a member of the Nordic Nazi party. Nazi uniforms were initially worn at SD meetings.

Current leader Jimmie Åkesson has worked to remove antisemitism from the party, introducing a zero-tolerance policy against Nazism in 2012. The party ditched its burning torch symbol – similar to British National Front insignia – and began using an image of a flower. It currently has 20 seats in the Swedish parliament.

An EFD spokesman, speaking on behalf of Ukip, said: "Parties within the group have differing views on the Israel/Palestine issue. The Sweden Democrats are a party which is worried by Islamic immigration and are pro-Israel.

“They have publicly acknowledged mistakes they have made in the past. They are a party completely opposed to racism and sectarianism.

“We have met their MEPs, and they are very decent people. We believe they have received unfair press for historical actions."

The EFD has 48 MEPs from seven countries. Mr Farage is its president and Ukip is the largest contributor with 24 members, followed by 17 MEPs from the controversial Italian party 5 Star Movement, led by Beppe Grillo. It also includes members from Lithuania, Latvia and the Czech Republic.

Also joining the group is Joëlle Bergeron, who left France’s National Front two days after last month’s elections following a row over her belief that immigrants to France should have the right to vote.

The EFD spokesman said Ms Bergeron "profoundly disagreed with the stance of her party on the immigration issue. She is cultured and well-educated. We are happy to work with her".

But John Mann MP, chairman of the All-Party Parliamentary Group Against Antisemitism, said: “Nigel Farage portrays himself as a moderate in this country while he courts parties with fascist roots in Europe, reneging on his promises not to do so. He owes the British public a proper and detailed explanation for his behaviour.”

A spokesman for the Community Security Trust, the Jewish organisation that monitors antisemitism, said: “We have said all along that we don't consider Ukip to be a racist or antisemitic party, but obviously there are Ukip activists who have said and written unpleasant things.

“We are concerned. They need to be careful not to drift off in that direction.

“Beppe Grillo seems to be an extreme and unpredictable character. Is that the kind of person Ukip wants to be associated with? That's worrying.”

Shneur Odze, a strictly Orthodox candidate who stood for Ukip in the European elections, defended his party’s new alliance.

"European politics is notoriously murky, complicated and legitimises all kinds of extremists. I’m very glad the far-right failed to form a group,” he said.

“I’m relieved that, unlike Labour, Ukip wasn’t tempted to cosy up to the anti-Israel haters on the left. All our partners have committed to pursue inclusive politics and distanced themselves from the views of their former colleagues."

Mr Grillo is a comedian, actor and political activist whose popularity has soared in Italian elections in the past two years.

He refused to apologise last year after using a Primo Levi Holocaust poem to attack the Italian government. He used antisemitic tropes to defend his actions.

France’s National Front, led by Marine Le Pen, and Holland’s PVV, led by Geert Wilders, were unable to form a group after failing to recruit enough parties to join them.

It is unclear whether other right-wing MEPs will seek to enter the EFD grouping. Mr Farage had repeatedly said Ukip MEPs would not sit with NF members, but said he expected others to join the group soon.