Police in Greece said on Wednesday they had opened an investigation after a report on Britain's Channel 4 television showed a Greek neo-Nazi threatening to turn immigrants into soap.
The statements were made by Alexandros Plomaritis, a 44-year-old who ran for parliament for the neo-Nazi party Golden Dawn in last year's election.
"We are ready to open the ovens. We will turn them into soap...to wash cars and pavements. We will make lamps from their skin," Plomaritis said of undocumented migrants, whom he also termed "miasma" and "subhuman".
Plomaritis was filmed ahead of the election handing out Golden Dawn tracts in an open-air market and chatting with his friends outside a cafe.
Golden Dawn dismissed the report as "grotesque".
"These views were stated to make people laugh," party spokesman Ilias Kasidiaris said in a statement.
"The cafe regulars were making fun of the English," he said.
Golden Dawn, formerly on the fringe of Greek politics, has seen its ratings soar since last year in a country weary of austerity and political corruption.
The party saw 18 deputies elected to parliament in June for the first time in its history and is the third most popular party in opinion polls.
Rights groups have regularly accused Greek police of turning a blind eye to suspected Golden Dawn attacks against migrants and political opponents.
Kasidiaris will be tried on Thursday for allegedly providing a getaway car to five men who beat up a student at a university campus in 2007.
The investigation into the neo-Nazi candidate's hate language was instigated by a special police department on racist violence that was only recently set up following international pressure.
Golden Dawn leader Nikos Michaloliakos gave a televised interview in May in which he denied the existence of gas chambers and crematoria during World War II.
He also called Adolf Hitler "a major historical figure of the 20th century."
The government condemned Michaloliakos at the time but he faced no legal sanctions.