Update Thursday, 10.30am:
A man accused of manufacturing handguns from his Warrnambool home has been released on bail.
The 41-year-old man appeared in Warrnambool Magistrates Court again on Thursday morning after being found suitable for the Court Integrated Services Program.
Magistrate Peter Mellas said the man had showed compelling reasons why he should be released from custody.
"You have a stable address to go to and your family are now very aware of your current situation and I think you are going to have more support than you have up until now," he said.
The magistrate also said the seized items had been sent to the Victoria Police ballistics team and a delay in analysis could see the man spend more time in custody than he is sentenced to serve.
The man was released on bail with conditions, including he report to Warrnambool police once a week, live at a static address and comply with CISP bail.
Earlier: A Warrnambool man has been charged over the alleged illegal manufacturing of handguns.
Jamie Butchmann, 41, of Belmore Road, appeared in Warrnambool Magistrates Court on Wednesday after handing himself into police earlier that day.
He is charged with six offences, including manufacturing a handgun without a licence, possessing equipment to manufacture a firearm, possessing ammunition, possessing a handgun and failing to answer bail.
During a bail application, Detective Senior Constable Richard Hughes, of the Warrnambool police crime investigation unit, alleged the man was making handguns at his home.
He said police attended the man's property last week after he failed to appear in court over unrelated charges of obtaining property by deception and making a false report to the police.
He said inside Mr Butchmann's room was obvious signs of his attempts to manufacture firearms, including metal piping, firing pins, live shotgun ammunition, an angle grinder and a welder.
"In 22 years, I've never seen anything like this," the detective told the court.
Detective Senior Constable Hughes said all of the items were seized and sent to the Victoria Police ballistics team for analysis.
The court heard Mr Butchmann was addicted to methamphetamine, lived in the garage of his mother's home and was "effectively illiterate" after he was run over by a car on Warrnambool's Mortlake Road about 20 years ago.
Lawyer Kiernan Celestina urged the magistrate to bail his client, stating Mr Butchmann had strong family support, a stable address, limited criminal history and was not necessarily facing a custodial sentence.
Magistrate Peter Mellas adjourned the matter and ordered the accused to undergo an assessment for the Court Integrated Services Program.
Mr Butchmann was remanded in custody until Thursday, when the bail application will continue.
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