Waris Ali and Dabeer Hussain, now both 18, allegedly chatted online about spying on and blowing up people and buildings associated with the far-right party.

Prosecuting, Annabel Darlow said the boys, who were in the same year at Westborough High School, discussed an explosive terrorist attack against the BNP on online chat service MSN.

She said Ali had "nurtured a particular poignant dislike" of the party.

The defendants both had a copy of a terrorist manual called The Proper Anarchist's Cookbook on their home computers, jurors at Leeds Crown Court heard this week.

The 3,000-page document contained instructions on how to kill someone and recipes for making gunpowder and a variety of bombs.

Miss Darlow said: "They can be followed simply, they don't require any degree of skill or expertise and they are effective. They result, if followed, in the production of explosives which have the capacity to kill or maim people."

In a raid on Ali's home in September last year, counter-terrorist police officers discovered 500g of potassium nitrate under his bed and 250g of calcium chloride under a sofa. Both chemicals are mentioned in the terror manual and can be used to make explosives, the court heard.

Jurors heard Ali had previously upset a teacher at Westborough High School by writing a death threat to Americans on a classroom white board.

He joined Mirfield Free Grammar to study A-Levels, but sixth form head Simon Hawkins said he found Ali's behaviour "intimidatory".