Harry William Buckle, 51, of Geelong, pleaded guilty yesterday to having possessed an explosive substance with intent to cause injury.

Judge Geoff Chettle remanded Buckle in custody for a pre-sentence psychiatric report.

He will appear in court for a further plea and sentencing at a later date.

Crown prosecutor David Cordy said a Stawell policeman on June 8 had observed Buckle carrying a heavy object across Stawell's Central Park and to a south-western corner of the oval near the Stawell Gift Hall of Fame and a rear gate to Waites Robson Stonemasons.

Police then observed Buckle pushing what appeared to be a wheelie bin across the oval.

Stawell Criminal Investigations Unit officers arrested Buckle at the rear gate of the stonemasons.

Items police found in the wheelie bin included a garden spray bottle, towelling material and a wooden box secured with masking tape.

The wooden box contained a grey battery and radio control circuit.

Other items police found included a 20-litre plastic bottle containing petrol, a black balaclava, backpack, plastic hose, remote control device, bolt cutters, jemmy bar, yellow-handled pliers and 100 matches bound with masking tape.

Mr Cordy said police believed the contents of the wheelie bin were a radio-controlled explosive device.

He said detonation of the device could have caused a fire and explosion fatal for a person in the immediate area and could have caused damage for more than a kilometre.

He said about 100 to 120 people were inside and five people outside a Stawell hotel about 70 metres away from the stonemasons on the evening.

Mr Cordy said police had Buckle under surveillance after receiving information about the possibility of this type of offence occurring.

He said the offence was towards the top-end of a scale and the only appropriate penalty was a substantial period of custody.

Mr Cordy said a maximum penalty for the offence was 10 years and Buckle had spent 331 days in custody since the offence.

He filed two victim impact statements.

Defence counsel Dermot Dann said his client acknowledged the offense was serious and had not intended to injure any people.

He said Buckle had instructed him to apologise to the owners of the stonemasons, their family and employees for the fear he put them through and a loss of security they referred to in victim impact statements.

Mr Dann said his client apologised to police who were involved with the investigation and their families, to the citizens of Stawell for the danger he brought to the town, to his family and friends for the shame he had brought to them and to the court for his conduct.

Mr Dann said the events were out of character for Buckle who had no prior convictions and was highly regarded in the community.

Buckle's wife and two of his three children were in court to support him.

Buckle began his own stonemasons business in East Geelong in 1983.

Mr Dann said his client suffered from depression and anxiety and had stopped his medication prior to the offence.

Mr Dann said the owner of the rival stonemasons had intervened in a work dispute and Buckle had developed a sense of paranoia.

He said Buckle saw that he and his family were under threat and was determined to `make a stand'.

"In his mind he struggles to understand how he got to such a state himself," Mr Dann said.

Mr Dann said the offence happened at a time when there was no likelihood that a person would be in the premises. He said Buckle had been a model prisoner at Melbourne Assessment Prison.