Magistrate Reginald Dama said he had "no choice" but to deny bail to Roedolf Viviers, 28, who faces charges of murder and assault with intent to cause grievous bodily harm.

His co-accused, Zayne van Tonder, 33, charged with assault, was granted R2000 bail.

Dama said he was initially concerned that R2000 was too high for Van Tonder's bail, because bail "is not used for the purpose of punishment".

He said Sakkie Smith, for the accused, assured him that the sum "fits his pocket".

The two accused allegedly made racist remarks to Muhammad Fayaaz Kazi and his friend Anser Mahmood at a fast food outlet in Magaliesburg on August 6. A fight ensued. Kazi was severely beaten and died in hospital.

Before reading out his ruling, Dama said seven witnesses had pointed Viviers out in an identity parade.

The racial nature of the attack, and the degree of violence which apparently accompanied it, meant that "not only was the community of Magaliesburg outraged... [this anger was felt throughout] the length and breadth of the country".

From the testimony of the investigating officer, it appeared that Viviers behaved like a "professional pugilist", he said.

Dama said many groups, including the SA Communist Party, picketed outside the court demanding that the accused be denied bail.

"Their voices cannot be ignored."

The judiciary had to balance individual rights to freedom with the interests of justice. Viviers failed to present compelling reasons to suggest his release was in the interests of justice.

Both Van Tonder and Viviers appeared emotionless in the dock. They wore the pale blue shirts they appeared in the previous day, but Viviers' was creased.

On Tuesday, Smith read out an affidavit by Viviers in court, detailing why he believed he should be granted bail. Viviers said he looked after his ill and elderly mother. He was the sole breadwinner of his family and provided for his fiancée and her young child.

Viviers had signalled his intention to plead not guilty to all charges. There was no risk he would skip bail, Smith said. He suggested that Viviers' bail be set at R5000.

Prosecutor Micky Thesner said the State opposed bail as Viviers was accused of a schedule five offence which, according to the Criminal Procedure Act, requires him to prove exceptional circumstances exist to get bail.

The State did not oppose Van Tonder's bail application and suggested it be set at R2000.

Outside the court on Wednesday, Kazi's father-in-law Hasimbhay Motara broke down as he said his daughter would be satisfied with the court's decision.

"We are convinced that Fayaaz has not died in vain."

A multi-cultural South Africa could "not afford another incident of this nature", he said.

Another family spokesman, Zahib Asmal, said: "The family is understandably sad that Fayaaz is not here today... [But we] have every confidence that justice will take its course".

"We feel for the families of the two men [who are] also victims of this crime."

Iqbal Jassat, executive member of the Media Review Network, said outside the court that the decision to keep Viviers in custody was a victory for tolerance.

"It is the first instance where the judiciary has taken cognisance of the potent danger that religious intolerance, racial bigotry and Islamophobia present."

Jassat gave testimony on Tuesday that calling a Muslim Osama bin Laden was derogatory. This was because Bin Laden was seen as the "embodiment of evil" in Western culture.

He said he was "absolutely overwhelmed" by the degree of confidence Dama placed in his testimony. Dama earlier hailed Jassat's evidence about the negative impact of Islamophobia on society.

Jassat said he hoped the case would prevent further violence associated with religious intolerance.

The matter was postponed to November 29 for further investigation.