Police raided about 100 properties across Germany today and seized material belonging to a suspected neo-Nazi youth group.
The Interior Ministry said it believes the Heimattreue Deutsche Jugend (HDJ), which organises camping holidays for children and young people, pursues unconstitutional aims.
"Personal computers and written documents were confiscated and officials are combing through them. If they find proof of aggressive, anti-constitutional behaviour, a ban may follow," said a ministry spokesman, adding that police made no arrests.
The HDJ is a neo-Nazi youth club which offers young people leisure activities but also familiarises participants with Nazi thinking and leads them blindly into right-wing extremism, the ministry said in a statement.
"We must be vigilant of efforts to attract children and young people through seemingly unpolitical leisure activities which lead them astray into a Nazi mentality," said State Secretary August Hanning.
In Germany, it is illegal to display Nazi symbols and deny the Holocaust.
In May, Germany banned two right-wing organisations described by Interior Minister Wolfgang Schaeuble as "reservoirs of organised Holocaust deniers".
On its website, the HDJ says it fights for an independent Germany, for traditional values and for a lifestyle reflected in a healthy body, spirit and character.