It is alleged Pc Alex MacFarlane said: "The problem with you is you will always be a ++++++. Pc MacFarlane does not deny the words but says he was trying to calm the arrested man down and not racially abusing him.
Pc MacFarlane told police investigating the complaint that he was explaining that Mauro Demetrio should be proud of who is and "not try to hide behind your black skin." The trial is continuing.
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Two members of the public were injured along with two police officers who were in the unmarked vehicle.
Scotland Yard recorded 1,235 Islamophobic attacks in the last 12 months, compared with 811 in 2015.
Officers say the child, aged two, was targeted in the Lewisham Shopping Centre.