Manchester: A 14-year-old boy in Blackburn in northern England, radicalised by an Australian ISIS recruiter, plotted an attack on an Anzac Day Parade in Melbourne from the bedroom of his parents' home, a court has heard.

"It is clear that the purpose of this proposed attack was to promote the ideology and agenda of ISIS," prosecutor Paul Greaney QC told Manchester's Crown Court.

"Their plot was developed over the Internet and the intention was that police officers should be murdered by beheading."

The plot included the making of a 'martyrdom video' that would be used for ISIS propaganda.

The boy, now 15, who cannot be named for legal reasons, was in court for a sentencing hearing after pleading guilty to inciting terrorism overseas.

He arrived in court with his family and sat quietly in court, in grey shirt, striped tie and thick glasses on a youthful face. His hair was slicked back and he sat looking curiously around the court.

Mr Greaney said the boy, a Muslim of Bangladeshi heritage, had difficult teenage years as his parents separated.

At age 13 he was an intelligent, though easily distracted 'clown' at school.

However, in February 2013 he moved from a small school with Islamic values to a bigger, secular school. This was a "major shock", Mr Greaney said, and the boy began behaving badly.

On October 2013 he "praised Osama bin Laden and stated his own desire to become a jihadist and a martyr".

At home he spent all night on his computer, his mother told police, studying foreign affairs and talking on the internet to people he hadn't met.

A formal 'intervention' failed to change his behaviour. Indeed it escalated.

The boy threatened a teaching assistant, Mr Greaney said, saying he "would stab (him) in the neck with his pencil and kill him like Halal".

Later he told another teacher he was plotting to kill someone. In class he was heard "loudly and aggressively stating that Americans were murderers".

And he told a psychologist "people think I have links to terrorism, I might go on jihad".

By late 2014 he was making open Islamist statements at school (where his nickname was now 'the terrorist'), showing propaganda videos such as beheadings to other students, talking about death and torture and his desire to be a suicide bomber.

He told a teacher "you are on my beheading list". He threatened to kill several other staff members.

In January 2015 he described the Charlie Hebdo attackers as his heroes. He told a counsellor that he was in touch over the internet with a radical preacher.

"(That) contact was just one part of (his) extremist social networking and just one part of what led to and maintained his radicalisation," Mr Greaney said.

At the time, a psychiatrist found no evidence the boy was suffering from any psychiatric disorder.

In early March, with "overwhelming" evidence of the boy's continuing radicalisation, police decided to refer the case to its counter terrorism branch, and arrest the boy on suspicion of making threats to kill.

He was arrested at his home on March 25. Officers followed him upstairs and asked him where his telephone was - he lifted up his mattress and said "it's under here, I hid it when I knew the police were here".

He was bailed while police continued their investigations. At that time, Mr Greaney said, the boy contacted extremists on Twitter to warn them, and they deleted evidence of their connection to him.

On the phone, police found a "substantial body of evidence to demonstrate that (the boy) was committed to the cause of ISIS and jihad".

His screensaver was an ISIS flag, and he had videos of beheadings, three editions of an ISIS magazine, hundreds of photos of ISIS fighters, and excerpts of a speech calling for "lone wolf attacks in home countries". He had searched for news items on ISIS, and information on explosives.

In early March he contacted someone in France via social media, discussing whether it was better to travel to Syria or mount an attack at home.

He contacted a woman in the US and said she should encourage her children to be martyrs, saying "let ur kids grow! Lols ... And then booooom". In another conversation he discussed travelling to join ISIS in Syria.

"A clear picture emerges of a young person who was ... thoroughly and dangerously radicalised and committed to ISIS and the idea of violent jihad," Mr Greaney said.

One of the boy's online contacts was Abu Khaled al-Cambodi, an Australian whose real name is Neil Prakash, a "well known figure in ISIS who figures prominently in ISIS propaganda and is regarded as a major recruiter," Mr Greaney said.

The boy indicated he had been observing targets in Lancashire and was "preparing to see my Lord".

Al Cambodi treated him like a little brother, the boy later said. Al Cambodi put him in touch with an Australian man, allegedly Sevdet Besim.

Besim was the friend of Numan Haider, who in September 2014 attacked two police officers, and was shot and killed.

On March 16, Besim allegedly first contacted the boy, saying "I'm the brother from Australia". The contact was made over a phone messaging app that is encrypted.

Over the next nine days the two allegedly exchanged 3000 messages. The boy pretended to be a much older man.

He "wasted no time in making plans for terrorism," Mr Greaney said. He "gave Besim a choice between Hijrah (joining ISIS in Syria) or an attack in his own country".

"It is clear that Besim did indeed intend that he should die in his attack," Mr Greaney said. He even wrote a message in his phone with instructions for his burial.

The boy told Besim to make a video to send to al-Cambodi. Besim allegedly said he "would love to take out some cops".

On March 18 there was a key exchange.
Boy: Date?
Besim: April 25th ANZAC DAY
Boy: sounds good
Besim: Make sure the dogs remember this as well as there (sic) fallen "heroes"
Boy: Loool yep

Soon after, the boy also suggested Besim "break into someone's home and get your first taste of beheading."

"This aspect of the planning seems to have drifted away", Mr Greaney said. "But it is a frightening indication of the lengths to which (the boy) was prepared to go."

On March 19 they discussed attack planning - the boy presented three options, a gun attack on police, a car attack on police or a knife attack on police.

On March 21 the boy decided "Anzac Day it is", Besim saying "this will mean they remember this on that day every year after".

The boy told Besim, while discussing machetes, "Bro it gotta be heavy n sharp. Like sword. Quick beheading then move to next target ... U gotta be a lion."

On March 25 Besim allegedly summarised the plan: "so far the plan is to run a cop over on the Anzac parade & then continue to kill a cop then take ghanimah [spoils] and run to shahadah [martyrdom]".

At one point the boy used his "powers of persuasion" to "put Besim back on track" when he expressed doubts, Mr Greaney told the court.

Besim allegedly then said "I feel like a young kid with a ticket to Disney World can't wait ahahah".

A few hours later the boy was arrested and his phone confiscated.

Mr Greaney said evidence suggests Besim was not deflected from his intention to attack by the arrest.

"The position of the prosecution is that a major terrorist plot in its late stage, orchestrated from the north of England but to be carried out in Melbourne, had been thwarted," Mr Greaney said.

"(The boy) told (a psychiatrist) that he was convinced that if the police had not disrupted his activities, a massacre would have occurred. He thought he would become notorious."

A consultant psychologist said the boy showed "some limited remorse" and "continues to present a significant risk of continuing to engage in violent radical behaviour".

James Pickup QC, for the defendant, said he accepted that the boy was "dangerous" for a short period, but since his arrest there had been "considerable change, substantial change" for the better.

Because of his problems at school, and the medical condition which was causing his eyesight to fail, the boy felt he "only existed on the internet, he only existed on his phone".

"The void (in his life) was filled when he went on his phone," Mr Pickup said. It was filled by ISIS propagandists.

They encouraged him to get a Twitter account, which he did in January and where he quickly became a 'celebrity' among extremists with 24,000 followers, admired for his apparent knowledge of Islamic history and philosophy, according to Mr Pickup.

One witness who had several conversations with the boy said in a statement "rejected by the society he knows, more than ever he was vulnerable to indoctrination".

Justice John Saunders said most details of the terror plot appeared to have come from Besim, not the boy.

"The role (the boy) played, which may be a significant role in lone wolf attacks, was moral support, encouragement to go ahead with it, giving justification for it and giving some practical advice when needed," Justice Saunders said.

"The void in his life that at the beginning of this year was filled by the extremist dogma of the ISIS propagandists no longer exists," Mr Pickup said. "It has been filled by positive and constructive influences."

The sentencing hearing at Manchester Crown Court continues.