Labour Party chairman Hazel Blears says the British National Party made gains in May's local elections because voters felt ignored by mainstream politicians
Hazel Blears says the BNP must be 'driven out' of communities
She said the BNP's success had been a "major concern" for Labour.
Ms Blears was speaking to the party's ethnic minority taskforce in Leicester on Saturday.
Ms Blears said: "Extremist politics flourishes where mainstream politics leaves a vacuum. All parties must take the responsibility for this."
She also urged the party to forge new links with communities to fill the "democratic vacuum" that the far-right group had exploited in some areas of the country.
"On streets and estates where people feel no one is on their side, that their views are ignored, where traditional parties take their votes for granted, then the BNP can step into the gap," she said.
"They can pose as community champions. They can promise to make a difference to people who feel let down."
The BNP could, however, be "turned back" and "driven out" through better organisation and by educating people about what the party stood for, she said.
Ms Blears also insisted most voters did not like what the BNP stood for, arguing that it was merely a refuge for protest votes.
"But crucially, we need to remove the conditions in which they can thrive.
"We need to rebuild our local democratic institutions, so there can be no democratic vacuums.
"We need a lively community spirit on every street and estate. We need well-funded political parties. We need mainstream candidates in every ward.
"Only where mainstream democratic politics fails, can fascism take hold. So we must not fail."