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MELBOURNE, April 15 (Reuters) - A group of Muslim Australians planned to attack a grand final football match in Melbourne in 2005 attended by 97,000 fans, Australia's biggest terrorism trial heard on Tuesday.

But security raids on the homes of some members in July 2005, three months before the Australian Football League (AFL) grand final, forced the group to change its target and begin planning attacks on Melbourne's casino during a Formula One race weekend or another football match, the court heard.

Muslim spiritual leader Abdul Nacer Benbrika and 11 of his followers have pleaded not guilty to charges they planned a bomb attack to force Australia to withdraw its troops from Iraq.

Australia has about 550 combat troops in Iraq, which it plans to withdraw by about the middle of this year. Australia also has about 1,000 troops in Afghanistan.

A former associate of the 12 men told the Victorian Supreme Court on Tuesday that Benbrika had told him the group was targeting the AFL grand final, the biggest football match in Australia each year, local media reported from the court.

"He said the AFL grand final was the original target," Izzydeen Atik told the court.

Atik said the AFL attack was cancelled after Australian security agents and police raided the homes of some members. He said the raids had raised security concerns among the group and robbed it of its finances, which were seized by authorities.

He said the group then decided to target Melbourne's Crown Casino during the city's Formula One Grand Prix and an AFL pre-season match.

The prosecutor has told the court that Benbrika, who praised al Qaeda leader Osama bin Laden as a "great man", told the group that Australia was a land at war and jihad was justified.

The prosecutor said police raids on the men's homes had found literature on how to make bombs and video tapes with messages from Osama bin Laden and showing beheadings.

Atik said Benbrika had shown him videos of masked men beheading a non-Muslim dressed in orange. He said another member told him: "This is the type of thing we should learn".

Atik said he had been introduced to the group as an expert in credit card fraud who could help raise money to fight a "violent jihad". When he said theft was forbidden in the Muslim religion, he said he was assured it would be "halal" or permitted.

"Benbrika told me it was permissible to steal from the kuffar (non-believers) because it was lawful to take their blood, therefore their wealth is lawful (to take)," Atik said.

The 12 charged are: Abdul Nacer Benbrika, Fadl Sayadi, Ahmed Raad, Aimen Joud, Abdullah Merhi, Amer Haddara, Shane Kent, Majed Raad, Hany Taha, Shoue Hammoud, Bassam Raad and Ezzit Raad.

All face charges of being members of an unnamed terrorist organisation and planning to use explosives or weapons for an undisclosed terrorist act, with the intention of coercing a government or intimidating the public.

The trial continues. (Reporting by Michael Perry; Editing by David Fogarty)

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