Ten people were taken to hospital, five with serious injuries with one of them requiring treatment in the emergency room. Police arrested six people and took scores more into custody.
An estimated 1,500 people gathered in Limhamn square to protest against a planned appearance by the leader of the Svenskarnas parti (Party of the Swedes) who was due to make a speech.
Even before the party leader, Stefan Jacobsson, showed up there were signs of potential trouble as counter protesters threw smoke bombs and fire crackers.
Chaos ensued when Jacobsson began speaking as his words were drowned out by protesters chanting "No Nazis on our streets." He did manage to complete his speech after which there were clashes between demonstrators and the police.
The authorities attempted to quell the crowd by using police horses but encountered a radical element amongst the 1,500 assembled. Local newspaper Sydsvenkan reported that most of the protesters behaved well but that there were people there intent on causing trouble.
The atmosphere worsened when the police mounted on horses rode into the heart of the square. A police van also collided with a protester and the incident will be investigated by the force.
"We were forced to ride in because masked demonstrators had moved to the outside of the square and we needed to make some arrests," police press officer Ewa-Gun Westford told the TT news agency.
Pictures taken by the TT news agency appear to show police horses trodding over people in the midst of the chaos.
"I am shocked at the police's extensive force," Matilda Renkvist of Skåne against racism, an organizer behind the demo, told Sydsvenskan.
Westford admitted that the pictures looked bad but that the police were forced to take action as the protest had escalated. When asked by TT if that was the right line of conduct she declined to comment.
Among the six people that were arrested one was being held on suspicion of assaulting a police office.
A later speech held by the party of the Swedes in neighbouring Helsingborg passed without major incident. Last year a rally held by the anti-Muslim Swedish Defence League sparked similar ugly scenes in Malmö.