Police in west Sweden arrested two people on Tuesday following raids on a car and two apartments in the town of Falkenberg, which led to the discovery of the potentially deadly explosives.
A 30-year-old man and a 41-year-old man appeared at Varberg District Court on suspicion of breaching Swedish laws on the possession of flammable and explosive goods.
Police revealed on Tuesday night that a 71-year-old woman and a 33-year old man had also been questioned in connection with the case.
And Christian Krappedal, a press assistant for the anti-immigration Sweden Democrats told the TT news agency that one of the suspects was a councillor for the anti-immigration Sweden Democrat party in the Halland region.
The Hallands Nyheter newspaper reported around noon on Wednesday that the head of the Sweden Democrats' local branch in the politician's town had confirmed that the person had requested to leave the party.
The news followed intense speculation in the Swedish media that at least one of the men linked to the case was known to support far-right groups and that Nazi propaganda was also unearthed at one of the searched properties.
Tommy Nyman, a police inspector working on the case, refused to discuss the alleged nationalist links with The Local ahead of Krappedal's announcement, but conceded that it had been a dramatic week for the police force.
“Yes, that it has,” he said.
“550 kilograms of dynamite…that's a lot and it is a very unusual find.”
“First we found some explosives at a house – 150 kilograms. Then we got a tip-off and found some more in a car and then we found 350 kilograms in another building.”
The suspects have not been named in the Swedish media. But Anders Roy, a lawyer for the 41-year-old, told Aftonbladet that his client had come across the dynamite through his line of work and had not been planning any criminal acts.
The younger suspect, 30, has admitted buying explosives from his older friend, his lawyer Lars Brandel told Swedish media.
Falkenberg, in western Sweden, is a pretty coastal market town that dates back to the thirteenth century. Situated around 100km south of Gothenburg, it is home to more than 20,000 people.