Alleged Sydney terror teen gets bail

A 15-year-old Sydney boy locked up on terrorism charges has been granted bail in the NSW Supreme Court.

Justice Michael Adams said that, on the Crown case, the teenager was aged just 14 when he was overheard on tapped phone calls having "very worrying" conversations with men who were all "significantly older" than he.

"The extent to which he was really aware of all the implications of what he was saying is, because of his age, somewhat doubtful; and they smacked to my mind of a certain kind degree of empty or at least aspirational bravado," Justice Adams said on Thursday afternoon.

It is alleged the Georges Hall schoolboy took part in a terror plot involving four co-offenders to target government buildings, including federal police headquarters.

A text message allegedly written by the teenager in 2014 and read out during an unsuccessful December bail application in another court said: "I'm going to get to paradise through banana. God is great. No God but Allah".

Prosecutors allege the word "banana" was a code for "firearm".

The teenager has not had contact with any of his co-accused in over a year, Justice Adams said on Thursday, adding that he has suffered a "psychological reaction which has gravely affected his mental health" and that his condition could worsen in custody.

But he did not underestimate the seriousness of the teenager's alleged crimes, he said.

"The problem is posed by the extreme ideology that underlies these charges - the disregard in that ideology of the rights of ordinary people to go about their lives without fear, the disdain for the rule of law, and for the authority of the courts and the institutions of our government," Justice Adams said.

"When allied with an apparent willingness to kill or injure, these attitudes make the holders of them very dangerous.

"Nor do I underestimate the violent folly to which youngsters of the applicant's age can be induced to undertake by manipulative and, usually, cowardly elders."

Handing down his decision on Thursday, Justice Adams described the boy's family members as supportive.

"From all that I can tell they seem to be respectable people whose response to the first indication of (the boy's) involvement with these other men was one of shock," he said.

Several members of the teenager's family gathered in the Supreme Court on Friday, crying and waving up to their young relative as he broke into a smile on the court's prison-link screens.

The teenager will be living under effective house arrest whilst out on bail and must comply with conditions including a curfew and a ban on internet use or owning a mobile phone.

His family has agreed to put up $750,000 in security and offer a $100,000 cash bond.