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There is something different in the air at Christiania these days — the usual spicy aroma of marijuana smoke now occasionally mixes with the smell of tear gas and burning tires. That's because, more than three decades after Europe's oldest and largest commune was established as an antidote to "selfish society," Danish authorities are moving to close it down. More than 90 people were arrested a few weeks ago after groups of youths fought running battles with police, throwing bottles and cobblestones and burning homemade barricades. The riot, a rare occurrence in this normally placid Scandinavian country, was prompted by police arriving to demolish a shelter deemed unsafe by the authorities.

"There is a radicalization between young people and police in Copenhagen that we haven't seen in years," says Henrik Bang, professor of politics at the University of Copenhagen. "And the conflict will get worse."

Since 1971 the commune's 800 residents, inspired by the ideals of peace and free love, have maintained a free-wheeling idyll in this former navy base — an overgrown woodland spotted with lakes and pretty redbrick and wood houses that provides a retreat for artists, musicians and free-thinkers of all stripes in a self-declared "free state" that flies its own flag and does not pay market property tax rates.

But Christiania sits on prime real estate in Copenhagen's upmarket Christenhaven neighbourhood, and Denmark's conservative government wants to reclaim the territory for an ambitious housing project.

"I think ordinary Danish people just think it's a little odd," explained Bang. "People are living in houses worth $5 million, the land has big recreational possibilities — so why should they be allowed to govern [themselves] outside Danish society?"

Traditionally, the commune's friction with local police has been over drug policy. Pusher Street, Christiania's ramshackle main thoroughfare, allowed cannabis dealers to display their wares in glass-topped cabinets, graded according to strength — until a police incursion in 2003. Still, the authorities claim, some $200,000 of marijuana is still bought and sold every day in Christiania, and critics charge that the commune long ago sold out its ideals.

"The original idealism has long since evaporated," says Jens Sorensen, a Copenhagen-based political consultant. "Christiania is now home to an 'alternative' elite."

Still, the old hippie idealism still shapes many of the rules that govern the commune: Selling property is not allowed, and instead of cars — also banned — residents use bicycles to ferry everything from groceries to children.

At the day care center set on the shore of the commune's wooded lake, minder Richard Lonsdale has just put on a movie for children after finishing school classes. "I've been here for five years and it's changed a hell of a lot," he says. "There's been a general hardening of attitudes [from the police] — they think we're the enemy, but we don't teach our kids that."

As well as the kindergarten, Christiania also boasts a health clinic, a book shop, a vegan restaurant and a concert venue, which gets transformed into an impromptu dining hall once a year when residents organize a Christmas party for the city's homeless.

But the clashes with the authorities has brought about changes in the attitudes of a traditionally tolerant Danish society. The current conservative government, for example, rules in coalition with the openly anti-immigrant Danish People's Party. In response, a new political party — dubbed the New Alliance — was set up in May, electing its leader, Syrian-born Nasser Khader, as the country's first-ever member of parliament from the 8% of the population whose origins are foreign. And, in the seven weeks since the Christiania riots, the New Alliance has become Denmark's third largest party, boasting 20,000 members and polling 15 percent of the popular vote.

"Danish society used to a be a consensus society," says Khader. "But in the last few years Danish politicians [have] forgotten the centre. We want to go back to the middle of the road."

But even a New Alliance surge in elections expected later this year could be too late for the communards of Christiania. As they make the most of the long summer evening on a recent Tuesday, the conversation among the gardeners, painters and barbecue chefs can quickly turn tense. "The government is taking the temperature of how it's going to be when they clear the whole place out", says Marco Malcopes, the 25-year old manager of the commune's Info Cafe. "If that's their intention we showed them what will happen — we have to defend the places we live in."

• Christopher Thompson