UPDATE 5-Greek police arrest leader, lawmakers of far-right Golden Dawn
* Biggest crackdown on elected party since fall of junta
* Party members charged with participating in criminal group
* "Nothing can scare us!" party spokesman says
* Government rules out snap elections
By Renee Maltezou and George Georgiopoulos
ATHENS, Sept 28 (Reuters) - Greek police arrested the leader and more than a dozen senior members of the far-right Golden Dawn party early on Saturday after the killing of an anti-fascist rapper by a party supporter triggered outrage and protests across the country.
The arrests, which are the most significant crackdown on a political party in Greece since the fall of a military dictatorship in 1974, are the biggest setback to Golden Dawn since it entered parliament on an anti-immigrant agenda last year.
"Nothing can scare us!" shouted a handcuffed Ilias Kasidiaris, spokesman of the party, as he was transferred to the prosecutors' office flanked by hooded anti-terrorism police officers carrying machineguns.
Kasidiaris and the party's leader, Nikolaos Mihaloliakos, three other lawmakers and 13 other members of the party were arrested on Saturday on charges of founding and participating in a criminal organisation.
Police also confiscated two guns and a hunting rifle from Mihaloliakos' home, saying he did not have a licence for them.
Ranked as Greece's third most popular party, Golden Dawn is under investigation for the murder of rapper Pavlos Fissas, who bled to death after being stabbed twice by a party sympathiser last week.
The party has denied any links to the killing of Fissas.
The anti-terrorism force, which is handling the case, was looking for one more senior party official and lawmaker, police spokesman Christos Parthenis said. Two police officials were also arrested on Saturday, he added.
Late in the evening, the detainees were taken under high security to the prosecutors' office and charged officially on evidence linking the party with a string of attacks, including the stabbing of the rapper on Sept. 17 and the killing of an immigrant earlier this year, court officials told Reuters.
Public Order Minister Nikos Dendias hailed the arrests as "a historic day for Greece and Europe."
"I want to assure Greek citizens that the investigation will not end here," Dendias said. "There is no room for criminal organisations in Greece."
Mihaloliakos has warned that Golden Dawn could pull its 18 lawmakers from parliament if the crackdown does not stop.
If potential by-elections were won by the opposition, as some polls indicate, Greece's fragile two-party coalition would become politically untenable, Mihaloliakos has argued. But a government official said Greece might be able to avoid such by-elections depending on how the constitution is interpreted.
The party called on its website for protests in solidarity with its jailed leader and members.
Several hundred of its supporters gathered outside police headquarters waving Greek flags and chanting: "Long live the leader!" and "Blood, Honour, Golden Dawn". About 200 protesters unfurled a banner reading: "Golden Dawn" outside the party's headquarters in Athens.
"Golden Dawn is here. It will not back down. You cannot jail ideas," Golden Dawn MP Artemis Mattheopoulos, who is not among those detained, told reporters.
'TACTIC TO IMPRESS?'
Prime Minister Antonis Samaras' government has so far resisted calls to ban the party, fearing it could make it even more popular at a time of growing anger at repeated rounds of austerity measures. It has instead tried to undermine the party by ordering probes that could deprive it of state funding.
Samaras ruled out snap elections after the arrests. The government has also played down talk of political instability and promised all Golden Dawn members would receive a fair trial.
The arrests surprised Greeks wary of political theatre in a country where little has been done over the past year to rein in a party that is frequently accused of attacking migrants, a charge it denies.
"It's good that they arrested them, but I'm afraid that we will start killing each other now," said Dimitra Vassilopoulou, a 58-year old housewife.
"Does the government actually mean it or is it just a tactic to impress us? Why didn't they do anything when the immigrants were killed? How come they just discovered that Golden Dawn is a criminal organisation?"
Golden Dawn controls 18 of parliament's 300 seats and had so far appeared immune to accusations of violence and intimidation, scoring 14 percent in opinion polls before the stabbing. Two polls this week showed support had fallen to as low as 6.7 to 6.8 percent.
Greek lawmakers do not lose their political rights or seats unless there is a final court ruling against them. But the government has proposed a law that could block state funding for Golden Dawn if police find links to Fissas' murder.
The party, whose emblem resembles a swastika, rose from obscurity to enter parliament last year after promising to mine Greece's borders to prevent illegal immigrants from entering. Its members have been seen giving Nazi-style salutes and its leader has denied the Holocaust. The party rejects the neo-Nazi label.
Human rights groups have accused the party of being linked to attacks on immigrants, but this is the first time it is being investigated for evidence linking it to an attack.
It is not the first time its leader is being prosecuted. In 1979, Mihaloliakos was convicted of possessing explosives.
Mihaloliakos' daughter rushed to kiss her father as he entered the court, on his way to the prosecutors' office.
"I'm proud of my father, like any child would be if its father faced such political charges," Ourania Mihaloliakou told reporters. "We are stronger than ever."
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