A fanatical teacher plotted a series of Islamic State-inspired attacks on Big Ben, the Queen's Guard, and Westfield shopping centre, saying "we are a death squad sent by Allah", a court heard.
Umar Haque, 25, allegedly enlisted the help and support of fellow extremists at his local mosque where he tried to groom children with role-play and extremist videos.
He also showed pupils as young as 11 videos of beheadings in a bid to "foster and encourage" them into adopting his extreme ideology at the Islamic school where he worked, jurors heard.
Haque became "fascinated" by last year's Westminster Bridge attack and discussed bringing a reign of terror across London in secretly recorded chat, the Old Bailey heard.
In a bugged conversation with one of his co-accused four days after the March 22 attack, Haque allegedly said:
Prosecutor Mark Heywood QC told jurors that in 2016 and early 2017, Haque was set on carrying out one or more violent attacks with others on civilian and police targets.
Abuthaher Mamun, 19, Muhammad Abid, 27, and Nadeem Patel, 26, who knew Haque through the Ripple Road Mosque in Barking, east London, are accused of helping him.
Mamun assisted with attack planning and set about raising money to fund it through trading in options, Abid was involved in "discussion and lower level of support" while Patel agreed to provide a gun, jurors were told. In April 2016, Haque came to the attention of authorities when he tried to travel to Turkey from Heathrow, the court heard.
His deadly plans were revealed in bugged conversations in Abid's Volkswagen and home and Haque's Ford Focus the following year, the court heard.
Haque discussed his fears of a "snitch" and justification for killing civilians during a five-hour conversation with Abid in the wake of the Westminster Bridge attack.
He allegedly discussed using a car, leaving bombs in a lift, and going for "a quick spin" around Westminster.
On May 2 last year, talking in his car, Haque allegedly told Mamun that the day IS took Arabia would be like "us winning the World Cup".
Mr Heywood told how Haque taught children aged between 11 and 16 at the Lantern of Knowledge Islamic School in Leyton, east London, between September 2015 and September 2016.
He showed his pupils images of guns, burning of passports and beheadings with a knife or sword to "encourage them into his mindset", Mr Heywood said.
He and Mamum were also heavily involved in running the Ripple Road mosque where Haque assumed the role of "teacher", jurors were told. In the months before his arrest in early 2017, he "manipulated" the vulnerable children, telling them he intended to die a martyr and IS was "good", the court heard.
He showed them "horrifying" images, including one of a dead boy, saying they would meet the same fate if they did not "join" and promise to become a martyr, the court heard.
All four defendants were arrested on May 17 last year. When Haque was stopped, police seized his phone, which had recordings of IS leader Abu Bakr Al-Baghdadi on it.
Inside Haque's Ford Focus, police uncovered a large sharp-tipped kitchen knife, the court heard.
In a search of his home, officers found a collection of IS propaganda and links to YouTube videos on how to make explosive devices on a memory stick.
Officers also found a notebook containing a 21-point list with reference to the "benefits of martyrdom".
Items on the next page included buying weapons and a van, the court heard.
Haque, of Manor Park, and Mamun, of Barking, both east London, deny preparation of terrorist acts between March 25 and May 18 last year.
Haque denies a further count of preparation of terrorist acts, for allegedly leading exercises in physical training and role play at the Ripple Road Mosque.
He also denies one count of dissemination of terrorist publications, for showing videos at the school between July 2015 and February 2016.
Abid, of Newham, east London, denies one count of failing to disclose information about acts of terrorism.
Haque and Patel, of Forest Gate, both deny one count of conspiracy to possess a firearm.
Haque has admitted one count of dissemination of terrorist publications and charges of collection of information, while Patel has pleaded guilty to one count of possession of a firearm.
The trial, which is due to go on for six weeks, continues.