A MAN arrested for plotting a gun massacre on New Year's Eve has claimed he was approached to be a paid ASIO informant.

Ali Khalif Shire Ali - known as Ali Shire - is accused of plotting a gun attack at Federation Square and is well connected in extremist circles in both Melbourne and Sydney.

The Herald Sun can reveal the 20-year-old told an Islamophobia forum he was offered $200 a tip to "go out in the community" and gather information for ASIO - an offer he said he refused.

Since the 2015 ASIO approach it has appeared he became more radicalised, sprouting an extremist version of Islam online and drifted closer to hate preachers.

In May 2016 the former Swinburne University student was part of a group of men who refused to stand for a magistrate during a terrorism hearing.

An image from a clip showing Ali Khalif Shire Ali speaking at an Islamophobia forum in 2015. Picture: Supplied
An image from a clip showing Ali Khalif Shire Ali speaking at an Islamophobia forum in 2015. Picture: Supplied

The group - who were supporters of the Tinny Terrorists, five men accused of trying to flee Australia via boat and join an overseas terrorist group - told the media that they "stand for no one but Allah".

After the trial he was seen leaving the Melbourne Magistrates' Court with extremist preacher Junaid Thorne.

His behaviour escalated so much that at the start of this year Melbourne's Joint Counter-Terrorism Team made him a "high-level" person of interest and closely monitored his activities.

Online Mr Shire has connections with associates of Numan Haider - who was killed when he attacked a police officer with a knife. He is also friends with the son of convicted terrorist mastermind Abdul Nacer Benbrika.

Benbrika's passport was cancelled in 2015 after border authorities suspected he was attempting to join jihadi groups in Syria.

But it was his connection with associates of a 15-year-old who killed a police worker in Sydney, which most interested the nation's domestic spy agency.

Ali Khalif Shire Ali in police custody. Picture: Mark Stewart
Ali Khalif Shire Ali in police custody. Picture: Mark Stewart

The lanky terror accused has claimed Australia's spy agency tried to recruit him in 2015 - visiting his home, "harassed him" with several phone calls and once followed him to his university.

Speaking at hard-line Islamist Hizb Ut Tahrir group event in 2015 the terror accused said ASIO wanted information about associates of 15-year-old Farhad Jabar - who was shot dead after he killed a NSW police worker outside Parramatta police station.

Mr Shire said the ASIO agent had told him: "Ali, we know you are a good guy. We know you have knowledge of things that are happening. You know the thing happening in Parramatta, which is in Sydney, the shooting, you know and you're friends with certain people. We want you to get out in the community".

"I knew then they wanted me to be an informant and I said 'no - get lost'."

He said he thought he was in a "Bond movie" after the agents followed him to his university and texted him to look "to his left".

"He was standing there a couple of meters away. I thought I was in 007 the movie. He called again and I had to pick up cos he was looking at me," he said.

In an earlier meeting he said an agent had quizzed him about his associations and his thoughts on Islamic State.

"They were trying to get to know me, 'who are my friends, where do you work' - this and that. I stayed quiet cos I know their tricks and whatever you say to them they will use as evidence against you," he said.

"They start to get to the real questions, like who are your friends with, what do you think about IS, what are your thoughts about those groups - again I stayed quiet."

Mr Shire said he had stayed tight-lipped because he did not want to get his "friends into trouble."

He said he was offered $200 per tip but told the agents informing against other Muslims was "haram" (forbidden).

Mr Shire said his sister had sought legal advice for him, who had told him he did not need to speak to the agents.

He said he was approached because the spy agency believed he was "young and naive". His older sister was made aware of ASIO's approach to Mr Shire.

Mr Shire told the Hizb Ut Tahrir forum that ASIO would have informants in the audience.

Hizb Ut Tahrir have handed out booklets actively encouraging Muslims not to meet with the nation's top spy agency.

The booklet also compared the country's counter-terrorism agencies to insects.

"The best way to send cockroaches scurrying is to turn on the lights," it says.