The leader of a German "anti-Islamisation" party has stood down after controversy surrounding him posing with a "Hitler moustache".

Lutz Bachmann, 41, founder of the Pegida group, caused a stir after he uploaded a photo of himself on to Facebook resembling the former leader of the Nazi party along with the caption "he's back".

Bachmann defended the image as a joke referencing a 2012 satirical novel about Adolf Hitler's return to modern-day Germany.

Bachmann told Bild: "I took the photo at the hairdresser's, for the publication of the audiobook of the satire [novel] He's Back ... you need to be able to joke about yourself now and then."

As well as the photo, German newspaper Dresden Morgenpost also reported a Facebook conversation between Bachmann and one of his friends in which her referred to as immigrants "cattle" and "scumbags".

Responding to the comments, Bachmann replied: "We don't comment about private matters." He also deleted his Facebook as the controversy escalated.

After his photograph went viral across the world, Bachmann has said he is stepping down from Pegida, which has grown to now have tens of thousands of supporters.