(In headline and paragraph 8, replaces references to "extremist" with "far right")
By Renee Maltezou and Deepa Babington
ATHENS, April 15 (Reuters) - Greek far-right Golden Dawn lawmaker Ilias Kasidiaris strode into a packed hotel room in central Athens last month to the sound of a marching song and supporters' cries of "Here comes the mayor!"
"In less than 100 years, Greeks will become a minority in their country. The only way to strike at the root of evil is through the municipal elections," Kasidiaris said, pledging to rid the Greek capital of "thieves and immigrants".
"We must win the May elections to save the Greek blood," he roared before leading the crowd in singing the national anthem.
The raucous gathering was just one campaign stop in an increasingly heated Athens' mayoral race, the most symbolic and closely watched battle in Greece's local and European elections in May - the first big electoral test for Prime Minister Antonis Samaras since he took power in 2012.
At stake is the right to run the ancient city that gave birth to democracy over 2,500 years ago but is now on its knees, riven by protests, rising homelessness and poverty-ridden areas.
After six years of recession and austerity, the election is being fought as much on national issues like an unpopular EU/IMF bailout as on local issues. Opposition parties see it as a test of sentiment on Samaras's pro-bailout government.
"The municipal elections now have more of a political meaning because they are being held for the first time in the middle of the chaos of the debt crisis," said Dimitris Mavros, head of the MRB polling agency.
The rise of far-right and anti-EU parties has been seen across Europe as voters shun the mainstream architects of austerity policies, such as in France, the Netherlands, Belgium and even non-euro zone Britain.
It has led to figures like Kasidiaris, who stunned viewers of a live TV debate before the election in 2012 by hurling a glass of water at one female politician and surging from his seat to slap another in the face, becoming household names.
Greek opposition parties such as Syriza on the left and Golden Dawn on the right - the anti-immigrant party accused of being a neo-Nazi criminal organisation - have tried to raise the stakes by calling the municipal elections the first step towards overthrowing the government.
"Everyone knows that the municipal elections have a deep political significance," said Gabriel Sakellaridis, the 33-year-old economist put forward by Syriza as its candidate.
"The Athens ballot will certainly send a political message. A message for resistance and dignity, for change and creativity. A message that will be heard and discussed, not only across the country, but also across Europe."
He and Golden Dawn's Kasidiaris are one of seven contenders, including two rival candidates from the ruling New Democracy party, a popular Communist party member, an HIV-positive gay activist as well as a right-wing lawyer, reflecting the chaotic post-crisis political landscape in Greece.
RESURRECTING THE PAST
In the lead is George Kaminis, the current Socialist mayor who boosted his fortunes by declaring himself an independent in November, capitalizing on anger among Greeks towards the established political class blamed for driving the country close to bankruptcy.
"Yesterday has no place in what's happening today," he said this month referring to Greece's decades-old political system dominated by two parties. "People have already left it behind. Only some hope in vain that they can resurrect it."
Coalition member PASOK, which put Kaminis forward in 2010, and the small Democratic Left party have come out in his support but have both kept a low profile during campaigning after seeing their support hammered over the crisis years.
The latest polls for the vote, the first round of which will be held on May 18 and the second a week later, show Kaminis at least 10 points ahead of his closest rival, New Democracy's Aris Spiliotopoulos.
Former Athens mayor and renegade conservative lawmaker Nikitas Kaklamanis, who was expelled from the party's parliamentary group last month for not backing a key reform bill, is close behind along with the Syriza and Golden Dawn candidates.
The outcome in Athens is likely to be decided by who makes it through to the second round with Kaminis.
Analysts say the major parties, knowing they are unlikely to win, may adopt a defensive strategy, with Samaras expected to play it as a victory if arch-rival Syriza loses while Syriza is likely to say it is satisfied with the showing of the virtually unknown, young candidate it has fielded.
"The one who loses the least will be a winner," Mavros said.
GOLDEN DAWN'S SECOND SURGE
Among the more fascinating sub-plots within the mayoral race is the campaign of Golden Dawn, whose leader and top lawmakers are in jail pending trial following a crackdown after a party sympathizer killed an anti-fascist rapper in September.
You wouldn't know the party is on the defensive based on its spirited campaigning, including Internet clips of featuring Kasidiaris - now the party's public face - striding through the bustling central Athens meat market to cheers and even a cry of "You are lovely! You're the best!" from a vegetable vendor.
At the Athens hotel gathering last month, Kasidiaris outlined a long list of priorities if elected - from vaccinating stray dogs to hosting ancient Greek-style games in the city and erecting a statue of a former Greek Orthodox archbishop.
"This candidacy is essentially the second surge for Golden Dawn, this time with the aim of taking power in Greece," Kasidiaris told Reuters at the party's headquarters.
Golden Dawn is Greece's fourth-most popular party according to recent polls. Its success echoes the sentiment of anger across Europe with fringe parties expected to fare well in European polls in May.
Kasidiaris dismisses the crackdown on the party as a ruse to steal votes, a claim he has repeated recently after a leaked video showed a government aide implying the government had tried to exert pressure on judges to jail members of the party.
The aide, who has resigned, said he made the comments for tactical reasons, and the government has denied any wrongdoing.
"A clique of judges who are being controlled by the political authorities have taken direct orders and aim to jail me so that I don't speak in the pre-election period," Kasidiaris said. "We will not falter... Greeks have opened their arms to us." (Writing by Deepa Babington; Editing by Hugh Lawson)