We present multi-component photoionization models allowing for local density inhomogeneities in the NLR to interpret the emission line spectra of Seyfert 2 galaxies . This approach leads to a successful match of a large set of line intensities from the UV to the NIR . In particular , the hitherto elusive NIR features [ SIII ] \lambda 9062 + \lambda 9531 as well as high-ionization lines like [ FeVII ] \lambda 6087 are consistently fitted . The predictions of CIII ] \lambda 1909 and CIV \lambda 1549 are considerably improved . From the detailed analysis of single-component photoionization models we derive the minimal radial extent of the NLR and the necessary span in density . Furthermore , we determine constraints on suggestions made about the role of matter-bounded clouds , and on proposed explanations for large [ OIII ] \lambda 4363 / \lambda 5007 ratios ( the so-called ‘ temperature problem ’ ) , and assess the usability of some emission-line ratios as indicators of the ionization parameter . We find that a systematic variation of the cloud column densities in a population of matter-bounded clouds is inconsistent with the trends and correlations exhibited by the emission lines in the diagnostic diagrams . Concerning the temperature problem , the only possibility that leads to an overall consistency with the strengths of all other observed emission lines is subsolar metal abundances ( as compared to e.g . the presence of dust , the existence of a high-density component , or matter-bounded clouds ) . In addition , the consequences of the presence of ( Galactic-ISM-like ) dust internal to the clouds were investigated . These models alleviate the [ OIII ] -ratio problem but did not lead to overall consistent fits . The most conspicuous fallacy lies in the extreme underprediction of Fe-lines , which is mainly due to the strong depletion of the Fe abundance . In our final model series , the NLR is composed of a mixture of metal-depleted ( \sim 0.5 ~ { } \times solar ) clouds with a radius-independent range in densities ( 10 ^ { 2 } to 10 ^ { 5 } cm ^ { -3 } ) distributed over a range of distances from the nucleus ( galactocentric radii from at least \sim 10 ^ { 20 } cm to 10 ^ { 21.5 } cm , for Q _ { tot } = 10 ^ { 54 } s ^ { -1 } ) . In order to encompass the observed range of each line intensity relative to H \beta , it turns out to be necessary to vary the spectral energy distribution incident on the clouds , qualitatively confirming the findings of Ho et al . ( 1993 ) . We found a successful continuum sequence by adding an increasing contribution of a hot black body ( T \approx 200 000 K ) to a steep powerlaw ( \alpha _ { uv - x } \approx - 2 ) . These continua imply that low and high-excitation objects differ in the strength but not in the basic shape of the EUV bump .