The plot was developed in an intense exchange of thousands of instant messages sent half way around the world from the teenager's mobile phone, London's Old Bailey was told.

One of the texts encouraged its recipient to "get your first taste of beheading".

A judge has asked for a pre-sentence report on whether the boy, reportedly the youngest person ever charged with a terror offence in the UK, was 'indoctrinated' into extremist beliefs – how it happened and whether it might be reversed.

The boy, who cannot be named for legal reasons, was 14 when he spent a 10-day period in March 2015 planning the attack in instant messages exchanged with an 18-year-old Australian man, prosecutor Paul Greaney QC told the court.

The young man is one of several Australians charged with plotting an Anzac Day terror attack in Melbourne.

The British boy appeared at the Old Bailey on Thursday by video link from Manchester, where he was accompanied by his father and sat listening to proceedings wearing a striped tie, grey shirt and glasses.

Asked how he pleaded to the charge of inciting another person to commit an act of terror outside the United Kingdom, the boy replied calmly "guilty".

"The evidence of this plot derives from literally thousands of instant messages between the defendant and [the Australian man] recovered from the defendant's mobile telephone," Mr Greaney said.

"Those messages reveal the intentions of the plotters and their targets, along with their motivation, which may be summarised as support for ISIS, and their enthusiasm for the attack."

Mr Greaney had earlier asked Justice Saunders to remove another count of inciting terrorism from the indictment.

On March 18, the boy had suggested the Australian man "break into someone's house and get your first taste of beheading", Mr Greaney said.

The Australian man replied that it seemed "a little risky" and preparation for that part of the plot then "drifted away", Mr Greaney said – but he argued it should be regarded as "part and parcel" of the charge the boy had pleaded guilty to, and should be taken into account at sentencing.

The boy was remanded to a secure detention facility for sentencing in Manchester Crown Court on September 3.

Justice Saunders asked for a pre-sentence report on "dangerousness", taking into account any possible indoctrination of the boy and how it might be reversed.

He also asked for a psychiatric report. The defence will prepare a report on the boy's medical condition, in particular his poor eyesight.

Justice Saunders told the boy the sentencing hearing would likely span two days and apologised, saying "obviously you wish to know your fate as soon as possible".

More details of the alleged communications between the boy and the 18-year-old Melbourne man were released by a judge in Australia in June, from a bail hearing.

Those communications allegedly revealed a plot to kill police and intelligence officers with firearms and "a massive machete".

During the conversations the boy pretended to be experienced in terror campaigns, saying at one point "Cant wait till my op [operation]. After hundreds of plans i can plan my own."

The Australian man told the boy he had a "massive machete" in his possession. "I cant wait now for the op," he allegedly told the British boy. "Lik [sic] I said though I'd love to take out some cops. Intelligence agents."

The 14-year-old boy told the Australian man he needed to videotape the attack and send it to "abu kambozz," a one-time social media handle for Melbourne-born Islamic state recruiter Neil Prakash.

"You are a lone wolf, a wolf that begs Allah for forgiveness a wolf that doesn't fear blame of the blamers. I'm [sic] I right?" the boy wrote.

"Pretty much," the Australian man replied.

In the intercepted communications, the British boy instructed the Australian man to "start dressing like a Kuffar [non-believer - sic]", quizzed him about weapons, and asked if he was "willing for a bullet to go through you".

During another conversation days later, the British boy told the Australian man not to underestimate the "difficulty of beheading a person" and advised him: "U gotta be a lion especially that ur doing it in public."

with Michael Bachelard