Three far-right activists charged under Victoria's racial vilification laws have told a court they didn't intend to insult Muslims in staging a mock beheading.

United Patriots Front members Blair Cottrell, 27, Christopher Shortis, 46, and Neil Erikson, 32, have pleaded not guilty to inciting contempt, revulsion or ridicule of Muslims in a video made in protest at plans to build a mosque in Bendigo.

United Patriots Front leader leader Blair Cottrell outside Melbourne Magistrates Court on Tuesday. Credit:Eddie Jim

The video, filmed outside the City of Bendigo offices on October 4, 2015, features Mr Cottrell speaking to camera about the mosque plans and directing Mr Shortis and Mr Erikson to decapitate a dummy with a toy plastic sword.

When the dummy is beheaded, red liquid spills onto the footpath.