In future ITER tokamak experiments the poloidal magnetic field and the plasma electron density profiles will be simultaneously measured using a far-infrared polarimeter. This paper presents the bench testing of a new polarimetric technique in which these quantities can be obtained by phase measurements only. Its application will result in a simpler instrument, more robust and less affected by fringe jumps and vibration problems than the conventional interferometer–polarimeter systems in use today. In this experiment a polarization modulation of the input beam is generated by recombining two coherent linearly polarized components, produced by a CO2 pumped FIR laser (λ = 118.8 µm), one of which is frequency shifted by a rotating grating. The beam is then sent through a half-wave plate rotated mechanically at 125 Hz and a fixed quarter-wave plate. When such a beam traverses the plasma, a time dependent phase shift is observed whose Fourier components in phase and in quadrature with the rotating wave-plate are related to the Faraday rotation angle and to the Cotton–Mouton effect, respectively. For this experiment the effect of the plasma has been simulated by a combination of a half-wave and a quarter-wave plates. Simple but effective phase measuring electronics have been developed to recover the two polarimetric parameters from the phase of the detected signal. The experiment has shown that variations in the azimuth and ellipticity angles of the polarization ellipse of less than 1° can be measured with a time resolution of the order of 10 ms.