Sydney: Australian police fired pepper spray to break up clashes between right-wing nationalists and anti-racism protesters on the streets of Melbourne on Sunday, the latest protest held by anti-immigration groups in the country.


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Far-right activists from the True Blue Crew, which says it is opposed to refugees and the "Islamisation" of Australia, faced off with members of a left-wing coalition promoting tolerance in the city.


Australia has seen a rise in far-right activist groups and political parties opposed to Islam and Asian immigration following a number of ‘lone wolf’ attacks by home-grown Islamist radicals.


Victoria Police said one person was arrested for possession of a weapon and one detained for breach of the peace, and a knife and a knuckle duster were confiscated.


“Police were forced to deploy capsicum spray when a small number of protestors attempted to breach a police line, with one person given aftercare as a result of the capsicum spray,” a spokeswoman said.


TV footage showed nationalist protesters holding Australian flags on poles or draped around their shoulders, while opposition protesters held placards with anti-racism messages.


The rally attracted hundreds of protesters and a heavy police presence kept the opposing groups separated, local media reported.


Australia, a staunch ally of the US, has been on high alert for home-grown Islamist attacks since 2014 and authorities say they have thwarted a number of plots.


Far-right groups and political parties like Pauline Hanson’s One Nation have seized on the mood to push anti-immigration agendas.


Concern about immigration has also seeped into the mainstream political discourse, with the governing Liberal-National coalition vowing to tighten rules around citizenship and require applicants to demonstrate how they have embraced “Australian values”.


Phillip Galea, a fixture at rallies organised by the True Blue Crew, was charged with planning a terror attack in August last year. 


It was the first time federal terrorism laws had been used to target such right-wing groups.