The British National Party leader Nick Griffin has admitted that he entered the British nationalist scene with views that "many would consider to be racist".

Testifying during his trial on charges of inciting racial hatred yesterday, Mr Griffin said: "There was [initially a nationalist] culture and a movement which I suppose was racist - that all Asian people behaved the same way and that we didn't really like them. That was it."

But he insisted his outlook had since changed and that his use of the word "Asian" during verbal attacks on the Muslim faith was a mistake, attributable to the fact he was thinking on his feet and making up his speeches as he went along. He did not "hate" anybody and had never deliberately set out to incite hatred, he claimed.

Mr Griffin insisted his distaste was not for "Asians" but for Islam, which he considered to be a "wicked, vicious" faith. He said: "When I criticise Islam, I criticise that religion and the culture it sets up, certainly not Muslims as a group and most definitely not Asians."

The BNP leader went on to suggest the whole of Europe would be forced to choose within "not too many decades" either to remain as a democratic secular society or to become an Islamic republic. "If this country becomes an Islamic republic, it would be in many, many ways far worse," he said. Islam, he claimed, was "the terrible mortal enemy of all our fundamental values. It's a dragon".

Mr Griffin said he looked at the inequalities and injustices in British society compared to how it "could have been" and he said: "I think this place is a disaster." He said hatred was created when people who saw problems felt they were not able to articulate their issues.

"There's a huge difference between criticising a religion and saying this is an attack on the people who follow it," said Mr Griffin.

He said there was sometimes hatred among the audience to whom he gave his speeches. But he said that once people were given constructive help and an outlet for their energies, that hatred "evaporates".

Mr Griffin, of Powys, Wales, and Mark Collett, of Rothley, Leicestershire, deny charges of using words or behaviour intended to stir up racial hatred.

The trial continues.