Members of a far-right German group who were arrested last week were believed to have been plotting "shocking" large-scale attacks on Muslims similar to the ones carried out in New Zealand last year.
Government officials said that investigations into 12 men detained in police raids across Germany on Friday had indicated they planned major attacks. German media reported that the group aimed to launch mass-casualty assaults on six mosques during prayers.
“It's shocking what has been revealed here, that there are cells here that appear to have become radicalised in such a short space of time,” interior ministry spokesman Bjoern Gruenewaelder told reporters in Berlin.
“It is the task of the state, and of course of this government, to protect free practice of religion in this country, with no reference to what religion it might be,” Chancellor Angela Merkel's spokesman Steffen Seibert said.
"Anyone practising their religion in Germany within our legal order should be able to do so without being endangered or threatened".
According to media reports, the group planned to use semi-automatic weapons to copy last March's attacks in Christchurch in New Zealand in which 51 people were killed at two mosques.
Friday's raids also led to the confiscation of a number of weapons, including axes, swords, guns and handmade grenades, reports said. Public broadcaster ARD reported that the police had an informant in the group, a 13th member who was not arrested on Friday.
Citing sources among investigators, ARD claimed that the informant had begun providing police with detailed information about the group in October, but had recently broken off contact.
Fearing for the safety of their source and that an attack might be imminent, investigators decided to carry out the raids at short notice, the report said.
The alleged leader of the group, which was known to the authorities and whose meetings and chat activity had been under observation, had detailed his plans at a meeting organised with his accomplices last week.
The alleged coordinator was a 53-year-old from Augsburg named by investigators as Werner S.
Of the 12 men arrested on Friday, four are believed to have founded the group while eight more had promised to support them with money and weapons.
The suspects, all German citizens, also included a police officer previously suspended over his links to the far right, North-Rhine Westphalia state interior minister Herbert Reul said Friday.
Bild claimed to have identified him as Thorsten W, a 50-year-old medieval history enthusiast whose posts online included pictures of himself with a sword and shield and rants describing Germany as a "radical left dictatorship".
Speaking to the Sueddeutsche Zeitung newspaper, German Interior Minister Horst Seehofer announced plans to tighten security checks for civil servants.
He added that the latest arrests were "a great success", but warned of the need "to act decisively and tirelessly on all levels against what is brewing in Germany."
Meanwhile German-Turkish Islamic organisation Ditib, which funds around 900 mosques in Germany, called for greater protections for Muslims in the country.
"We cannot stay silent in the face of hate and violence, nor can we relativise the danger coming from the right," the organisation said in a statement, adding that Muslims "no longer feel safe" in Germany.
German authorities have turned increased attention to the country's underground far-right scene since the murder of conservative local politician Walter Luebcke last June.