Angry protesters have burned placards and exchanged abuse in clashes between Reclaim Australia and anti-racism rallies in Melbourne.
At least four people were arrested and dozens sprayed with capsicum spray, which was widely deployed during the four hours of protests yesterday.
Hundreds of police blocked streets in front of Parliament House, separating the opposing groups.
Small groups of protesters from Reclaim Australia and the United Patriots Front were outnumbered by anti-racism protesters representing Rally Against Racism and United Against Islamophobia.
Police say organisers were warned their behaviour was close to crossing the line into inciting hatred, a criminal offence.
Assistant Commissioner Stephen Leane said a small number of hardline protesters had gone along to the rally with the intention of using violence against each other and police.
Both the Government and Opposition condemned the violent scenes.
Shermon Burgess, a reputed member of the Australian Defence League who runs the Great Aussie Patriot website, said the Muslim community had to "clean its mosques" and stop radicalisation.
"We do not want a White Australia policy, we want a safe Australia policy," he said.
Other Reclaim Australia and United Patriots Front protesters said halal certification was a stepping stone to allowing sharia law in Australia.
Coalition Against Racism and Fascism spokeswoman Vashti Kenway said anti-racism groups had mobilised to send a message that their rivals' views are not accepted.
Shadow attorney-general John Pesutto said it was disappointing the Government had repealed Victoria Police's move-on powers, which could have helped defuse volatile situations.
Ambulance Victoria said several people sprayed with capsicum spray were treated for breathing difficulties, including a man in his 50s taken to hospital.