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Residents of the Grampians in western Victoria have been left shocked and angered after witnessing a group of white supremacists in balaclavas rallying in the national park last week.

The ABC reports police investigated the incident at the weekend which involved about 20 or 30 men who could be heard chanting white power slogans and "Heil Hitler".

Halls Gap resident Luke Baker said he and some friends and their families had gathered at Lake Bellfield on Sunday night when they heard a group of men.

"There were couples with kids [at Lake Bellfield] and the kids had sort of said 'could you hear what they were saying across the lake?'" Mr Baker said.

"They had heard them yelling out 'white pride' over and over, and then they were chanting 'Ku Klux Klan' over and over, then 'white power', then there were these 'Heil Hitlers' over the course of two-and-a-half hours.

You could hear it quite clearly. It sounded like a fairly large group.

"They had a fire, which you're not permitted around the edges of Lake Bellfield. But we live here, you often see young couples with little fires."

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