For more reactions and analyses on this story, follow Friday's Germany updates here.

Germany's spy agency BfV has labeled the entirety of the far-right Alternative for Germany (AfD) party as an extremist entity.

The BfV, which is in charge of safeguarding Germany's constitutional order, said Friday's announcement came after an "intense and comprehensive" examination.

The designation gives authorities greater powers to monitor the party, with measures such as intercepting phone calls and using undercover agents.

Why is the AfD classified as extremist? 

The BfV said in its decision that the "ethnicity-and ancestry-based conception of the people that predominates within the party is not compatible with the free democratic order."

It cited the "xenophobic, anti-minority, Islamophobic and anti-Muslim statements made by leading party officials."

The party "aims to exclude certain population groups from equal participation in society, to subject them to treatment that violates the constitution, and thereby assign them a legally subordinate status," the agency said. 

The BfV has already designated the AfD in the eastern German states Thuringia and Saxony-Anhalt as proven extremist groups.

The AfD has repeatedly courted controversy in recent years, with its senior officials dismissing Germany's Nazi era as "bird shit" in the nation's history which spans over 1,000 years, or claiming Adolf Hitler was "forced" to invade Poland.  

Last year, AfD lawmakers were implicated in a report about an alleged plan for the mass deportation of millions of citizens.

Ahead of the parliamentary election in February this year, US billionaire Elon Musk endorsed the party, saying it was the only party that "can save Germany."

Interior minister says 'no political influence' behind move

In a separate statement, outgoing Interior Minister Nancy Faeser  stressed there was "no political influence whatsoever" in the findings of the BfV agency, which are based on a 1,100-page report.

She said the party was running a campaign against democratic order.

"The AfD represents an ethnic concept that discriminates against entire population groups and treats citizens with a history of migration as second-class Germans," Faeser said.  

"Their ethnic attitude is reflected in racist statements, especially against immigrants and Muslims," she added.

How popular is the AfD in Germany?

The party secured 20.8% of the votes at the election, finishing second behind incoming Chancellor Friedrich Merz's CDU/CSU bloc who had 28.6% of the vote. 

Recent polls, however, indicate the AfD is closing the gap with the German conservatives. A poll published by Forsa last week even put AfD at 26%, ahead of CDU/CSU with 24%.

How did the AfD react to the 'extremist' label?

AfD co-leaders Alice Weidel and Tino Chrupalla released a statement criticizing criticised the move, describing it as a "heavy blow" to democracy.

"The AfD as an opposition party is now being publicly discredited and criminalised," they said. 

Weidel and Chrupalla vowed to mount a legal challenge against the label, which they said was "clearly politically motivated."

Edited by: Rana Taha