The girl, a year 12 student at a Granville high school, sat hunched in the dock and looked straight ahead expressionless during a lengthy bail application in Parramatta Children's Court on Wednesday. Milad Atai was arrested by counter-terrorism police in Sydney. However, when magistrate Paula Russell denied her bail on Thursday morning, she put her head in her hands and started sobbing. Her pregnant mother also cried as her daughter was taken away wearing a green prison tracksuit, sneakers and a navy, floor-length head covering. Ms Russell acknowledged that the girl had no prior record, was weeks away from sitting for her half-yearly HSC exams and could potentially be waiting in custody until 2017 for a trial date.

However, she said the prosecution's case "appears to be strong" and a report by psychologist Hanan Dover, which said the girl was suffering from depressive and anxiety disorders and was a suicide risk in prison, had been made based on a 30-minute telephone conversation and a self-report questionnaire. The Sydney teenager has been refused bail. She said the girl's case had no "exceptional circumstances" that would allow the granting of bail under the state's new bail laws. Commonwealth prosecutor Imad Abdul-Karim told the court on Wednesday that the girl was allegedly used as a middleman by her relative, Ahmed Merhi, formerly from Melbourne, who is believed to be fighting for Islamic State in Syria. An elaborate police operation was detailed in court, including a police informant posing as a young extremist named "Abdul" who befriended the girl and Mr Atai.

In a recorded conversation, the girl allegedly said she had previously wired $10,000 to Syria via Lebanon but used a friend who worked for Western Union because she was underage and couldn't make the transaction herself. When asked whether the money was going to Islamic State, she replied, "Yes, I just do what Ahmed tells me to do." On March 7, Merhi allegedly texted his friend Mr Atai, who has been under heavy police surveillance after his home was raided by counter-terrorism police in 2014, and passed on the name and number of his relative, the 16-year-old girl. Mr Atai was then allegedly given $5000 cash by Abdul, believing it was money that had been raised by Muslim "brothers". Mr Atai met the girl in Guildford Park on Tuesday morning and allegedly handed her the money. Heavily armed police wearing plain clothes and driving unmarked cars then swooped.

Ms Russell rejected a suggestion by the girl's barrister, Michael Pickin, that the use of the police informant may amount to entrapment. "The proposition is not supported in the material before me," she said. The girl, from Guildford, will return to court on May 19.