  We study the narrow-line region (NLR) of the Seyfert-2 galaxy NGC 1386 by
means of long-slit spectroscopy obtained with FORS1 at the VLT. We use the
galaxy itself for subtracting the stellar template, applying reddening
corrections to fit the stellar template to the spectra of the NLR. The
continuum gets steadily redder towards the nucleus. The spatial distribution of
the reddening derived from the Balmer decrement differs from the continuum
reddening, indicating dust within the NLR with a varying column density along
the line of sight. Using spatially resolved spectral diagnostics, we find a
transition between central line ratios falling into the AGN regime and outer
ones in the HII-region regime, occuring at a radius of ~6 arcsec (310 pc) in
all three diagnostic diagrams. Applying CLOUDY photoionisation models, we show
that the observed distinction between HII-like and AGN-like ratios in NGC 1386
represents a true difference in ionisation source and cannot be explained by
variations of physical parameters such as ionisation parameter, electron
density or metallicity. We interpret it as a real border between the NLR, i.e.
the central AGN-photoionised region and surrounding HII regions. We derive
surface brightness, electron density, and ionisation parameter as a function of
distance from the nucleus. Both the electron density and the ionisation
parameter decrease with radius. We discuss the consequences of these
observations for the interpretation of the empirical NLR size-luminosity
relation. In the outer part of the NLR, we find evidence for shocks, resulting
in a secondary peak of the electron-density and ionisation-parameter
distribution north of the nucleus. We compare the NLR velocity curve with the
stellar one and discuss the differences.
