Arrested is a Labour councillor who was caught on camera calling far-right rioters "disgusting" and that they need to have their throats chopped.
In a video recorded statement to anti-racism demonstrators in Walthamstow, northeast London, councillor Ricky Jones of Princes, Dartford, stated, "We need to cut all their throats."
The Metropolitan Police said on Thursday that he had been arrested at an address in south-east London on suspicion of encouraging murder, and for an offence under the Public Order Act.
Scotland Yard said Mr Jones, a paid organiser with the Transport Salaried Staffs’ Association (TSSA) union, was being held in custody at a south London police station on Thursday evening.
Before his arrest, the 57-year-old had been suspended from the Labour Party, meaning he will no longer sit as a Labour councillor.
A Labour spokesman said: “This behaviour is completely unacceptable, and it will not be tolerated. The councillor has been suspended from the party.”
A TSSA spokesman said: “TSSA remains steadfast in supporting communities that peacefully stand against fascist aggression. We unequivocally do not condone any threats or acts of violence, as these actions are contrary to our values.”
The union did not say whether any action would be taken against Mr Jones.
His arrest came as a Labour MP reported an anti-fascist poster that equated “Zionists” with the far-Right to the police.
Sarah Sackman, the MP for Finchley and Golders Green, said material shared by groups ahead of a demonstration in North Finchley on Wednesday evening was “clearly anti-Semitic”.
The poster, from the group Finchley Against Fascism, read: “Get Fascists, Racists, Nazis, Zionists and Islamophobes out of Finchley.” A small number of demonstrators were said to have later chanted “Free Palestine” outside a local synagogue.
The two incidents came during a series of overwhelmingly peaceful protests against the far-Right around the country on Wednesday evening, organised by Stand Up To Racism.
The group responded to fears on Tuesday that far-Right thugs were set to target migrant advice solicitors and organisations, named on the Telegram social media channel, by staging counter-protests outside the buildings.
It succeeded in mobilising thousands of people at short notice, which, together with a strong police presence, appeared to have succeeded in forcing the far-Right to abandon its plans.
Sir Mark Rowley, the Metropolitan Police Commissioner, said on Thursday that a show of force from the police and the community had scared off far-Right rioters and described it as “a very successful night”.
In a statement, Stand Up To Racism said: “Fascist riots have taken place in towns and cities across Britain, leading to attacks on mosques and hotels housing migrants. All those who oppose this must join in a united mass movement powerful enough to drive back the fascists.
“We are the majority, they are the few. Britain has a proud history of defeating fascists and racists. We can defeat them again.”
The group is organising more protests and vigils this weekend, including in London, Manchester, Southampton, Chorley, Lancaster, Weymouth, Derby and Preston.