The video, shot with a secret police surveillance camera hidden in Gary Dobson's flat in Eltham, south-east London, also shows the youths brandishing a variety of long-bladed knives. Most chillingly, Neil Acourt is seen acting out the same "over-arm bowling" stabbing movement used to inflict one of the wounds on Stephen Lawrence.
The surveillance operation was mounted on the orders of former detective superintendent William Mellish, who took over as head of the murder investigation in June 1994. Neil Acourt, 22, his brother Jamie, 21, Luke Knight, 20, Dobson, 22, and David Norris, 21, were later charged as a result of a private prosecution by Stephen's parents. None of them was convicted.
The camera, concealed in an electrical plug in Mr Dobson's living room, captured events over a two-week period in December 1994, 20 months after Stephen was stabbed to death by a white gang at a bus stop in Eltham.
The 80-minute film, which was never shown to a jury, shows Neil Acourt stroking the blade of a large knife as he sits in an armchair, watching television. He demonstrates a cutting action to Knight, instructing him: "Put it on something - right, and just dig straight in deep, watch."
The video makes plain that the youths suspect they are being bugged. "A waste of taxpayers' money," says one of them, derisively.
Even so, it gives an insight into the suspects' attitudes. David Norris says at one point: "If I was going to kill myself, do you know what I'd do? I'd go and kill every black c**t, every Paki, every copper ... I'd go down Catford and places like that with two sub-machine guns, and I'd take one of them, skin the black c**t alive, mate, torture him, set him alight. I'd blow their two legs and arms off and say go on, you can swim home now."
Neil Acourt: "I reckon that every nigger should be chopped up, mate, and they should be left with nothing but f***ing stumps." Mr Acourt, watching the Royal Variety Performance on television: "Black c**t, get off our f***ing royal performances, you."
Mr Knight: "D'ya remember Enoch Powell? That geezer, he knew straight away, he went over to Africa and all that ... he knew it was a slum, he knew it was a shithole and he came back here saying they're uncivilised and all that, and then they started coming over here and he knew, he knew straight away, he was saying, no, I don't want them here, no f***ing niggers, they'll ruin the gaff and he was right, they f***ing have ruined it."
Gary Dobson, watching an advertisement for Malibu: "Niggers having a good time in the sun. All the white people waiting at a bus stop. All the niggers are having a good time at the bar, drinking." Mr Acourt: "That's racist, that advert."
In one exchange, the group appear to be goading the police. Mr Martin says: "If they can't even figure out who done the f***ing murder, that's their f***ing problem. They can blame us, but they ain't going to get no joy."
Mr Acourt agrees: "All they want is a name. They don't mind how innocent they are, they want to put someone away for it." Knight adds: "If it was us, surely there'd be forensic f***ing evidence and all that." Mr Acourt rejoins: "Anyway, they take it up the arse."
Other sequences border on the comical. An episode of Coronation Street is heard playing in the background as the suspects tuck knives down their trousers.
Mr Acourt, eating his dinner, breaks off from making racist jokes to observe: "Pucker, these little pies, ain't they?"
Mr Mellish, who is now retired, told the inquiry that he had hoped that the suspects might confess on film to murdering Stephen.
Asked why he thought they were so quick to suspect the bug, Mr Mellish suggested that they had received advice from Mr Norris's father, Clifford, a notorious south London criminal.
"These 18-year-old spotty youths were using the telephone box in the public street and not their own telephone," he said. "They had to be briefed by somebody."
The inquiry continues today.