The Anti-Nazi League accused the police of acting 'disgracefully' after they ruled demonstrators had to stay away from the site in Sawley - just eight miles outside Burnley where the BNP won three seats in May's local elections.
Police issued the ban last weekend to 'safeguard public safety'. They said they were powerless to stop the BNP's Red, White and Blue festival as it was held on private land.
Superintendent David Mallaby, divisional operations manager, said given the two groups clearly have different political opinions there was a 'potential for difficulties'.
It is estimated nearly 1,000 people went to the festival.