The Government has given police £670,000 towards the cost of protests by the English Defence League (EDL) and its opponents.
The force spent up to £900,000 policing marches through Leicester by the EDL and Leicester Unite Against Fascism on February 4 last year.
The Home Office noted it was the second time in 18 months the EDL had staged a protest in the city centre.
The previous demonstration, in October 2010, cost the force an estimated £700,000.
On both occasions, the group's presence drew counter-protests by Leicester Unite Against Fascism.
Police drew on forces across the country to help it put 2,000 officers on the streets on both occasions.
Police minister Damian Green has now authorised a payment to the force of £671,000 in recognition it had been placed in "exceptional" circumstances by facing two protests in a short space of time.
Chief Constable Simon Cole and city MPs had lobbied the Home Office for a payment.
Mr Cole said: "The marches and demonstrations by the English Defence League and Leicester Unite Against Fascism in February 2012 were unplanned events which required a substantial policing operation with significant cost.
"I am pleased we have been able to recoup some of these costs by way of the Home Office grant."
Leicester East MP Keith Vaz, who is chairman of the Commons Home Affairs Select Committee, said: "I am so glad the minister has listened to the concerns of the chief constable and others.
"At this time of cuts in the police budget, this grant will be most welcomed.
"My congratulations to the chief constable on making such an effective case and my thanks to the minister for understanding our needs."
Last year's march brought an estimated 700 EDL supporters to the city centre, while Leicester Unite Against Fascism staged a counter protest which's rally drew an estimated 400 supporters.
The bulk of the cost to police was officers' pay, travel and subsistence.
A number of mounted officers and other specialists were on duty
The police operation was credited with preventing a repeat of the violence which broke out when the EDL staged its previous major protest in the city, in October 2010.
Its supporters, who were held in a pen in Humberstone Gate East, pelted police officers with bricks, bottles and coins.
Up to 200 of its supporters later broke through police lines and engaged in running skirmishes with local youths, while another group attacked Asian diners in a restaurant.
A Home Office spokesman said: "Special grant procedures allow ministers to provide financial support where police forces face unexpected or exceptional costs which would otherwise threaten their financial stability."
Writing in a First Person column in the Mercury in the days after last year's protests, Mr Cole suggested the law could be changed to compel protest groups to pay towards the costs of demonstrations.
He wrote: "It is not for the police to set the laws, but I do think there needs to be some reflection about the costs and expectations placed on police forces as we are currently paying, on your behalf, the price of free speech.
"That price is significant and it is paid with the money paid in through taxes by us all."