We present new , intermediate resolution spectra ( \sim 4 Å ) of the compact radio source PKS 1345+12 ( 4C 12.50 , z = 0.122 ) with large spectral coverage ( \sim 4500 Å ) . Our spectra clearly show extended line emission up to \sim 20 kpc from the nucleus . This is consistent with the asymmetric halo of diffuse emission observed in optical and infra-red images . At the position of the nucleus we observe complex emission line profiles . Gaussian fits to the [ O III ] emission lines require 3 components ( narrow , intermediate and broad ) , the broadest of which has FWHM \sim 2000 km s ^ { -1 } and is blue shifted by up to \sim 2000 km s ^ { -1 } with respect to the halo of the galaxy and HI absorption . We interpret this as material in outflow . We find evidence for high reddening and measure E ( B-V ) > 0.92 for the broadest , most kinematically disturbed component . This corresponds to an actual H \beta flux 130 times brighter than that observed . From our model for [ S II ] \lambda \lambda 6716,6731 we estimate electron densities of n _ { e } < 150 cm ^ { -3 } , n _ { e } > 5300 cm ^ { -3 } and n _ { e } > 4200 cm ^ { -3 } for the regions emitting the narrow , intermediate and broad components respectively . We calculate a total mass of line emitting gas of M _ { gas } < 10 ^ { 6 } M _ { \odot } . Not all emission line profiles can be reproduced by the same model with [ O I ] \lambda \lambda 6300,6363 and [ S II ] \lambda \lambda 6716,6731 requiring separate , unique models . We argue that PKS 1345+12 is a young radio source whose nuclear regions are enshrouded in a dense cocoon of gas and dust . The radio jets are expanding through this cocoon , sweeping material out of the nuclear regions . Emission originates from three kinematically distinct regions though gradients ( e.g . in density , ionisation potential , acceleration etc ) must exist across the regions responsible for the emission of the intermediate and broad components .