Neil Lewington had developed a bomb factory in his bedroom at his parents' home and aimed to target "those he considered non-British", jurors were told.
He had an "unhealthy interest" in the London nail bomber David Copeland, America's Unabomber and Oklahoma bomber Timothy McVeigh, the Old Bailey heard.
Lewington, 43, was arrested at Lowestoft station in Suffolk last year after abusing a female train conductor.
He was found to be carrying the component parts of two "viable improvised incendiary devices".
Later searches of his home revealed a notebook entitled "Waffen SS UK members' handbook" containing drawings of electronics and chemical mixtures.
Prosecutor Brian Altman QC said: "The effect of these finds is to prove that this man who had strong if not fanatical right wing leanings and opinions was on the cusp of embarking on a campaign of terrorism against those he considered non-British."
Lewington, who lived with his parents in Tilehurst, Reading, Berks, is accused of preparing for terrorism by having the bomb parts in a public place.
He also faces two charges of having articles for terrorism - including weedkiller, firelighters and three tennis balls - two of having documents for terrorism and another of collecting information for terrorism.
Two further counts allege he possessed an explosive device "with intent to endanger life" and that he had explosives namely weedkiller.
He denies all eight charges.
Lewington had travelled up to see a woman in Lowestoft on October 30 last year and was arrested after drinking and smoking on the train and urinating in public, the court heard.
He was arrested for a public order offence at the station and his hold-all bag was searched, the court heard.
Mr Altman said: "The defendant had in his possession the component parts of two viable improvised incendiary devices.
"He had the parts which, if assembled together, would have created devices which if ignited would have caught alight and caused flames and fire.
"Later searches of the house where the defendant lived with his parents in Reading, in particular his own bedroom, revealed nothing short of a factory for the production of many such similar devices.
"In addition to all of that the police discovered evidence that the defendant sympathised with and quite clearly adhered to white supremacist and racist views."
Lewington had two video compilations of news and documentary footage about bombers and bombings both in Britain and the US, the court heard.
These included the Mardi Gras bomber, who targeted Barclays Bank and Sainsbury's, as well as Copeland and McVeigh.
Mr Altman said: "In addition to his extreme views on race and ethnicity the defendant had an unhealthy interest in bombers as well as bombings.
"Lewington was someone who had taken his interest and his practical skills far beyond the mere intellectual or academic levels.
"It is abundantly clear that in the privacy of his own bedroom and far from the gaze of his parents with whom he lived, this defendant had amassed the component parts of and had begun the manufacture of improvised explosive or incendiary devices, a production line from which he had garnered the two devices.
"The prosecution cannot say whether and cannot say where he would have placed and detonated these devices, but that doesn't matter.
"The very fact that this man was travelling from home in a public place with the constituent parts of such viable devices, including real explosive substances, together with other circumstances of this case, proves his intention to engage in an act or acts of terrorism.
"Further evidence of his purpose and intention is provided by the clandestine factory found inside the bedroom of his family house for the manufacture of further such devices."
Mr Altman said Lewington left school at 16 without qualifications but had worked in a number of electronics jobs.
He had been unemployed for 10 years after being sacked from his last job for being drunk.
He lived with his parents but had not spoken to his father for 10 years.
His mother said he had placed Plasticine in the keyhole of his bedroom so no-one could see inside.
"His parents, Margaret and Christopher, say he was a loner who spent time alone in his bedroom," said Mr Altman.
Lewington had made a number of girlfriends he met over mobile phone chatlines, calling himself Aristocrat or Amadeus.
Mr Altman said he had made racist remarks and spoke to some of converting tennis balls into bombs.
One woman was put off by him when he said "the only good Paki was a dead Paki" and he would not hit a woman but would "make an exception for a Paki".
He said he was a member of the National Front and wanted the Ku Klux Klan brought back, it was alleged.
Another woman, an Army cadet sergeant, said he asked if she had had dealings with the Nazi group Combat 18.
She said he had an interest in chemicals and had taken some weedkiller from her.
Later, he bought a child's chemistry set from Toys R Us and told her he could make explosives using it and household items, said Mr Altman.
"He said he had made tennis ball bombs and taken them to the woods to explode them.
"Lewington was found in possession of three tennis balls and a diagram showing how to convert them into shrapnel bombs," added counsel.
Another girlfriend said he spoke of making bombs and asked at which house in her street an Asian family lived.
"He explained how he could throw a tennis ball bomb or place it somewhere and then run away," Mr Altman added.
Lewington at first explained electronic timers found in his bag by saying he was an electrician.
In his wallet were handwritten notes entitled "device 1" and "device 2" with headings including "date", "place", "target", "weather" and "detonated?".
While in custody in Suffolk he said: "They think I'm a terrorist, don't they... I only made those things in my bag to light a friend's barbecue safely."
He also said the items were not for a bomb but "a bit of pyrotechnics for Halloween".
Lewington was denied a phone call to Stephanie Alam, the woman he was going to stay with, and said: "She's Mrs Bin Laden the terrorist and my name's Bin Laden."
An RAF bomb disposal officer was called out to examine the home made bomb parts, the court heard.
These were each made from a digital clock timer, designed to set off igniters made from match head powder, rubber bands, adapted lightbulbs, firelighters and pyrotechnic powder similar to that found in fireworks.
On his mobile phone, Lewington had a racist joke and an image declaring "100% White and Proud", a slogan associated with Combat 18, Mr Altman said.
Counterterrorism officers and a bomb specialist searched Lewington's home.
In his "extremely tidy" bedroom were padlocked toolboxes - one of which contained documents about making ammunition and gunpowder - as well as powders, methylated spirits, weedkiller and firelighters.
Lewington told police the weedkiller was for gardening, the court heard.
Mr Altman told the jury: "Needless to say, according to his parents he never touched the garden."
The SS handbook contained a "statement from the command council Waffen-SS UK", Mr Altman said.
It said: "A new group has been formed, the Waffen SS UK. We have 30 members split into 15 two-man cells.
"We are highly trained ex-military personnel and will use incendiary and explosive devices throughout the UK at random until all non-British people as defined by blood are removed from our country. This is no joke.
"In this country the most serious domestic terrorist threat is the ALF, start rewriting the books?
"Finally our motto: You cannot stop what can't be stopped."
Mr Altman told the jury: "You may conclude that this was a chilling mission statement, a statement of intention by this defendant, one he took very seriously and, quite clearly, an intention he had begun to put into effect."
The notebook also contained handwritten sections with titles such as "picking target areas", "transportation of devices", "parcel bomb (post)" and "counter surveillance", the court heard.
Under another title, "targeting/attacking Pakis" was written "general surveillance, names and addresses, observing Asians in cars, planting motion-sensitive bombs, hate mail, hit-and-run by vehicles".
A further page, entitled statement, read: "No longer will the weaklings rule the white man by lies and deceit, but the warrior will make his comeback, and rule by strength, honesty and love for his race."
The statement is linked to Combat 18, described as "Britain's leading neo-fascist group", Mr Altman said.
The trial was adjourned until tomorrow.
