An Australian terror suspect and a British teenager allegedly planned to pack a kangaroo with explosives, paint it with a symbol of Isis and set it loose on police.

Sevdet Besim, 19, was one of five people arrested last April as part of an alleged terror plot during Anzac Day commemorations for fallen Australian and New Zealand soldiers.

Besim allegedly discussed his plans online with a British boy, then aged 14.

A court in Melbourne heard that Besim wrote that he would "love to take out some cops".

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"I was gonna meet with them then take some heads ahaha," he allegedly wrote.

The alleged kangaroo plot emerged from a prosecution summary of internet communication during the early morning of March 20 last year.

"Communications resume in the early hours of Thursday 20 March 2015 with an image being sent by BESIM with a comment of 'look what I got ahaha'," the court heard.

"The conversation continues with BESIM detailing what he did that day and they have a general discussion around animals and wildlife in Australia including a suggestion that a kangaroo could be packed with C4 explosive, painted with the Isil symbol and set loose on police officers."

Besim is accused of planning to run over and behead an officer and shoot bystanders using the officer's gun. He has pleaded not guilty to four charges relating to planning an attack. A fifth charge was dropped.

The British teenager admitted plotting an Isil-backed beheading at the Anzac Day parade in Melbourne, all masterminded from his Lancashire bedroom. It emerged in court that the boy, now aged 15, was so extreme that his classmates had nicknamed him "the terrorist".

He became Britain's youngest terrorist and was detained for life last October with no chance of parole for five years.

Mr Justice Saunders said the teenager, who can't be named for legal reasons, would be released only when he was no longer a danger to the public.