The leader of the fast-growing German anti-Muslim movement PEGIDA has resigned after a photo of him posing as Hitler, as well as reports that he called refugees "scumbags", prompted prosecutors to investigate him for inciting hatred.
Lutz Bachmann, 41, had appeared on the front page of top-selling daily newspaper Bild on Wednesday sporting a Hitler moustache and haircut.
Bild and another paper said he had called aslyum seekers "animals" and "scumbags".
Kathrin Oertel, another PEGIDA co-founder and current leader, said his resignation had nothing to do with the Hitler photo but was linked to comments posted on the internet.
"Yes, I can confirm that Lutz Bachmann has offered his resignation and it was accepted," Ms Oertel said.
Mr Bachmann, who denied he was a racist, was told he faced a criminal investigation for inciting racial hatred.
State prosecutors in Dresden said preliminary proceedings had been launched following the Bild report.
Bild printed the photo of Mr Bachmann with Hitler-style moustache and hair on its front page.
It quoted him as having said the photo had been taken as a joke, prompted by a recent satirical book about Hitler called Er Ist Wieder Da (Look Who's Back).
The Dresdner Morgenpost newspaper also quoted what it said were Facebook messages from Bachmann saying asylum seekers acted like "scumbags" at the welfare office and that extra security was needed "to protect employees from the animals".
Deputy chancellor Sigmar Gabriel, the Social Democrat leader, said the real face of PEGIDA had been exposed.
"Anyone who puts on a Hitler disguise is either an idiot or a Nazi," Mr Gabriel said.
Last week Mr Bachmann played down a ribald comment he had made in 2013, seized on by the media, that "eco-terrorist" Greens, first and foremost former party leader Claudia Roth, should be "summarily executed".
"I am an impulsive person ... I regret I didn't resist my impulsiveness," he said last week.
Supporters of PEGIDA (which translates as Patriotic Europeans Against the Islamisation of the West) also staged their first major march in the east German city of Leipzig overnight, under the banner of that city's sister movement LEGIDA.
An estimated 15,000 people joined the anti-Muslim, anti-immigration public rally.
PEGIDA had forced itself onto the political agenda with anti-immigrant slogans that had attracted tens of thousands of people to regular rallies in Dresden in recent weeks.
However, the LEGIDA rally in Leipzig was outnumbered overall by more than 20,000 people who joined several smaller counter-demonstrations across Germany, officials said.
Police had banned the PEGIDA march that had been planned in Dresden earlier this week, due to a threat of an attack.
German Chancellor Angela Merkel had also condemned the group, in unusually strong language, as racists "with hatred in their hearts".
Reuters
