A teacher takes a class of female students at the Al Mukmin school founded by Indonesian radical Cleric Abu Bakar Bashir.

A teacher takes a class of female students at the Al Mukmin school founded by Indonesian radical Cleric Abu Bakar Bashir. Photo: Kate Geraghty

IN March, a group of Islamic radicals was scoping out new targets in Bali, hoping to enact their own murderous 10th anniversary of the 2002 attacks.

They had surveyed the Hard Rock Cafe in downtown Kuta and the Australian-run La Vida Loca bar in Seminyak. They had chosen a suicide bomber and planned to fund the operation by robbing a money changer and a gold store.

Abu Bakar Bashir.

Abu Bakar Bashir. Photo: Kate Geraghty

What is not widely known is that three of the five plotters for ''Bali III'' - including their leader, Hilman, aka Surya - were low-level drug pushers who were radicalised in Kerobokan prison when they were locked up with the original Bali bombers in the early 2000s.

According to research by the International Crisis Group, Hilman, who was serving a seven-year sentence for marijuana possession, was the prisoner's mosque functionary who came under the influence of Bali bomber Imam Samudra. On leaving prison, he became a full-time jihadist. Another plotter shared a cell with Amrozi.

The radicalisation of their cell mates was the Bali bombers' slow-burn revenge. If an attack had overshadowed this week's 10th anniversary commemoration, they would have their last, posthumous, laugh over their jailers. (Samudra and Amrozi were executed in 2008).

Indonesia's prisons are a breeding ground for terrorists, and so are some of the Islamic boarding schools. But despite the ever-present threat of terrorism, Indonesia shows no interest in tackling the issue.

After the authoritarian and secular regime of Suharto fell in 1998, many groups that were previously repressed thrived under ''Reformasi'' - Indonesia's flowering of freedom.

Among them were those groups with a radical religious agenda who wanted to replace the state of Indonesia with a caliphate under Islamic law.

Until the Bali bombing, whose death toll of 202 woke it from its torpor, the newly democratic Indonesia knew little or nothing of the growing number of deadly men in its midst. Ten years on, Indonesian law enforcement, spearheaded by Detachment 88, the anti-terrorism police, has had great success cracking down on religiously inspired radicalism. On his recent visit to Indonesia, the Australian Defence Minister, Stephen Smith, lavished praise, saying: ''There is no country in the world that is more successful in arresting and prosecuting terrorists [than Indonesia is].''

Since the first Bali attack, Indonesia has arrested 700 people for terrorism offences and prosecuted 500.

For every 10 prosecuted, one suspected terrorist - including some of Asia's most dangerous men - has been killed by police on the streets. That success story, though, contains the frightening truth that, in 10 years, Indonesia has produced 500 people with a proven link to terrorism, and many more who have gone unnoticed.

Every few months a new plot, with a new set of plotters, is uncovered.

Some, such as a recent group calling itself ''al-Qaeda Indonesia'', have progressed far enough to start making bombs - albeit ones that blew up by accident in the kitchen. Many now believe that law enforcement alone is not enough. They say the country's jihad factories, which still pump out recruits, must be shut down and the radicals de-radicalised. The effort so far, though, has been piecemeal and anaemic, marred by poor funding, little follow-through and an apparent lack of political will.

In Indonesian prisons, extremist preachers, terrorists and would-be jihadists are locked up with common criminals. Low-level terrorists - youngsters or those who have dabbled around the edges of a radical group - are housed with hardened jihadis, persuasive men with a seductive story to tell.

The most infamous of these men, Abu Bakar Bashir, is serving a 15-year sentence for helping to set up a paramilitary training camp in Aceh in 2010.

But inside prison he is surrounded by acolytes and young prisoners, and boasts in a written interview with Fairfax that he is ''busy spreading the word of Allah to the people''.

His words remain unrepentantly full of violent jihad - ideas of noble martyrdom and the overthrow of the state of Indonesia so ''that people's life may be managed by Allah's law''. Bashir refers repeatedly to ''evil Indonesia'' and offers a contradictory mish-mash of arguments to explain and justify the Bali bombs.

First he asserts that the massive bombs were set by three individuals, ''Mukhlas and his two friends''. He calls them ''mujahideen [holy warriors] who actively defended Islam'' and were ''slaughtered by the Jews, the US and their allies''.

In the very next paragraph he claims that the bombs were part of a conspiracy, a ''micro-nuclear device'' planted by the US to discredit Islam. ''So it was the US who essentially killed tens of Australians not the three mujahideen,'' he writes. ''God willing, Islam will win due to Allah's help of jihad,'' he writes, before then exhorting Australian journalists to ''convert to Islam so you will be saved''.

Ask most ordinary Indonesians about Bashir and his ilk and they shake their heads and pronounce him ''gila'' (crazy). But his carefully cultivated look of a gentle old scholar has made his loony rhetoric surprisingly resilient, despite the patent failure of the populace of Indonesia to rise up in support of holy war after the Bali bombings.

Jemaah Islamiyah, Bashir's former terror vehicle, is now mistrusted in the radical community because a few of its high-profile members - notably Bali bomber Ali Imron, and the former senior member Nasir Abbas - ''turned'' and had offered information to police. But a whole slew of new followers has since emerged. Bashir's new radical group, Jemaah Ansharut Tauhid, or JAT, has been involved in many of the latter-day plots which police have uncovered.

As disturbing is the fact that the boarding school Bashir co-founded, and where his son (and leader of JAT) Abdurahman Rohim is a teacher, is still pumping out fresh-faced ''martyrs''. Bali bomber Idris, an old boy of Ngruki, said of his alma mater recently: ''That is where jihad was taught.'' But suggest that the Al-Mukmin school in Ngruki, Solo might be closed down, and Indonesians simply laugh.