Tarik Chadlioui, 43, allegedly tried to recruit and radicalise fighters for ISIS as part of a terror cell from his home in the Sparkhill area of Birmingham.
The Moroccan-born cleric has been living in Britain with his wife and eight children since 2015, after moving to the UK from Belgium.
He is accused of posting video propaganda in support of Islamic State on his Youtube channel and other social media.
Mostefai was one of three ISIS gunmen who entered a theatre during a co-ordinated terror attack on Paris in 2015 which killed 130 people.
Chadlioui appeared before Westminster Magistrates' Court this afternoon after he was arrested in an early morning raid in the West Midlands City.
Spanish authorities say Chadlioui is an imam subscribing to Salafism, an ultra-conservative form of Islam.
The father-of-eight is said to have been wanted by several countries and is believed to be the 'spiritual leader' of a ISIS-supporting group in Spain.
Dressed in a traditional Arab robe and speaking through an Arabic interpreter, Chadlioui appeared fed up and tired and only spoke to confirm his name and address.
Benjamin Joyes, representing the Spanish authorities, said: 'We are opposing bail in the most strenuous of terms.
'This is an arrest warrant for Spain described as being a member of a terrorist organisation.
'In short these offences relate to what in this country fall under dissemination of terror material and encourage others to commit terror.
'It is alleged that the requested person with several others as a member of an organisation gave support to the terrorist organisation Islamic State by means of propaganda and incitement of new members to join the organisation.
'He produced audio visual material for the recruitment of jihadis on his YouTube channel for indoctrination and posted symbols and banners for Islamic State on social media.
Mr Benjamin added: 'The requested person stated that he is a frequent traveller and goes to Belgium regularly.'
According to Dutch media, Chadlioui visited several mosques in Antwerp, Belgium earlier this month before returning to the UK.
Anti-terror police used a European arrest warrant to detain Chadlioui in the early hours of Wednesday morning in the Sparkhill area of Birmingham as part of a wider investigation into support for ISIS.
He was one of six arrested across Europe, four in Majorca and another in Dortmund, Germany since the investigation, which focuses on terrorist material shared online, began in 2015.
Chadlioui, known as Tarik Ibn Ali, was born in Morocco but later moved to Europe where he is said to have formed links with groups including Sharia4Belgium, who aim to impose Sharia law across the country and Europe.
Benjamin Joyes, representing the Spanish authorities, said: 'We are opposing bail in the most strenuous of terms.
'This is an arrest warrant for Spain described as being a member of a terrorist organisation.
'In short these offences relate to what in this country fall under dissemination of terror material and encourage others to commit terror.
'It is alleged that the requested person with several others as a member of an organisation gave support to the terrorist organisation Islamic State by means of propaganda and incitement of new members to join the organisation.
'He produced audio visual material for the recruitment of jihadis on his YouTube channel for indoctrination and posted symbols and banners for Islamic State on social media.
Mr Benjamin added: 'The requested person stated that he is a frequent traveller and goes to Belgium regularly.'
According to Dutch media, Chadlioui visited several mosques in Antwerp, Belgium earlier this month before returning to the UK.
Anti-terror police used a European arrest warrant to detain Chadlioui in the early hours of Wednesday morning in the Sparkhill area of Birmingham as part of a wider investigation into support for ISIS.
He was one of six arrested across Europe, four in Majorca and another in Dortmund, Germany since the investigation, which focuses on terrorist material shared online, began in 2015.
Chadlioui, known as Tarik Ibn Ali, was born in Morocco but later moved to Europe where he is said to have formed links with groups including Sharia4Belgium, who aim to impose Sharia law across the country and Europe.
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