Stewart Kennedy remains behind bars after he was charged by Oxley detectives on Saturday.

The 28-year-old fronted Tamworth Local Court via video link on Monday when his Legal Aid solicitor made an unsuccessful bid for his release.

Police prosecutor Sergeant Alex Thom strongly opposed bail.

She said it was people like Kennedy who allegedly created a market for children to be victimised and that "considerable planning" would have gone into compiling and storing the material.

"Given the extreme bulk of the images, Your Honour, would have reservations," she said.

She said she expected the state prosecuting authority, the DPP, to take over the matter.

The court heard the police case is that real children featured in some of the images and videos that were discovered in Kennedy's possession.

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Defence solicitor Patricia Simpson said those serious files were "certainly there" in the police allegations but a large percentage appeared to be drawings and renderings.

She told the court Kennedy could live with his parents - who were seated in the courtroom in support - and could offer a house arrest condition.

She said he could report to police, steer clear of the internet, stay away from children, offer $2000 in surety and accept treatment from a doctor.

"I can't be satisfied that even these strict conditions can reduce the risk ... I have to refuse him bail today," magistrate Julie Soars said.

The court heard it was Kennedy's first time in custody.

Ms Soars said it was a very serious charge and police were still combing through the images and categorising them, though some had already been labelled "high-level".

Kennedy has not had to enter a plea to possessing child abuse material.

The case was adjourned to later this month.

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