A man has been arrested after allegedly doing burnouts around an Islamic family having a Sunday afternoon picnic.

The 43-year-old allegedly verbally abused the large family group who were sitting in a grassy area of the Bulli Tops Lookout, south of Sydney.

Police have been told the man racially abused the family before getting into his car and driving in circles around them.

He allegedly continued screaming anti-Islamic abuse before driving off.

The man was arrested in the car park, where officers seized a hammer and box cutter from inside his vehicle.

Wollongong Police District Commander, Superintendent Chris Craner says, “there is no place for any type of intimidation, abuse or violence in New South Wales.”

“I spoke to the victims this morning, they are quite shaken, the women at the time were crying.”

The man has been charged with intimidation and driving in a dangerous manner.

He’s been refused bail and and will face court today.

Investigators have referred him to the Fixated Persons Investigation Unit and are urging anyone with dashcam or mobile phone footage to come forward.