Aims: The recent outburst of the young eruptive star V1647 Orionis has produced a spectacular appearance of a new reflection nebula in Orion (McNeils nebula). We present an optical/near infrared investigation of McNeils nebula. This analysis is aimed at determining the morphology, temporal evolution and nature of the nebula and its connection to the outburst. Method: We performed multi epoch B, V, R, I, z, and K imaging of McNeils nebula and V1647 Ori as well as K_S imaging polarimetry. The multiband imaging allows us to reconstruct the extinction map inside the nebula. Through polarimetric observations we attempt to disentangle the emission from the nebula from that of the accretion disk around V1647 Ori. We also attempt to resolve the small spatial scale structure of the illuminating source. Results: The energy distribution and temporal evolution of McNeils nebula mimic that of the illuminating source. The extinction map reveals a region of higher extinction in the direction of V1647 Ori. Excluding foreground extionction, the optical extinction due to McNeils nebula in the direction of V1647 Ori is A_V ~ 6.5 mag. The polarimetric measurement shows a compact high polarization emission around V1647 Ori. The percentage of K_S band linear polarization goes from 10 -- 20 %. The vectors are all well aligned with a position angle of 90 +/- 9 degree East of North. This may correspond to the orientation of a possible accretion disk around V1647 Ori. These findings suggest that the appearance of McNeils nebula is due to reflection of light by pre-existing material in the surroundings of V1647 Ori. We also report on the discovery of a new candidate brown dwarf or protostar in the vicinity of V1647 Ori as well as the presence of clumpy structure within HH 22A.