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German police have detained another man in a neo-Nazi case that has shocked the nation, while rumours the group may have had secret service links abound.

It is thought two men found dead on Friday, a woman who is under arrest and the fourth suspect were behind the killing of a policewoman and the so-called “doner murders” of nine foreign-born food vendors around the country over several years.

“According to the evidence, it looks as if we are really confronting a new form of extreme right terrorism,” admitted Germany’s Interior Minister Hans-Peter Friedrich at a press conference.

Police say they found weapons used in killings and confessional DVDs in a burning house in Zwickau.

In a burnt out caravan nearby, they discovered the bodies of two male suspects who are thought to have committed suicide. But rumours are spreading they could have had links with the German secret services.

Neo-Nazis are normally subject to close surveillance in Germany and the two men and woman from the house in Zwickau were known to have had neo-nazi links in the past. Yet they apparently slipped under the radar for years.

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