Mr Choudary said he wanted to draw attention to Afghanistan's "occupation"
The home secretary has said he will back any request from police or local government to ban an Islamist group marching through Wootton Bassett.
Alan Johnson said he felt "revulsion" at the thought of Islam4UK's proposed march through the Wiltshire town.
Wootton Bassett has become famous for its repatriation ceremonies for fallen British service personnel.
Islam4UK says it wants to parade empty coffins through the town to draw attention to Afghan war casualties.
Mr Johnson said: "The idea that anyone would stage this kind of demonstration in Wootton Bassett fills me with revulsion.
"I find it particularly offensive that the town, which has acted in such a moving and dignified way in paying tribute to our troops who have made the ultimate sacrifice for their country, should be targeted in this manner."
He added: "If the Wiltshire Police and local authority feel that a procession of this kind has the potential to cause public disorder and seek my consent to a banning order, then I would have no hesitation in supporting that request."
Islam4UK, which has been linked to the radical al-Muhajiroun movement, said the town was chosen to create maximum publicity.
Spokesman Anjem Choudary said: "We are having a procession, it's in Wootton Bassett but it's not about the people there and it's not against them personally - rather it's to highlight the real cost of war in Afghanistan.
"The sad reality of the situation is that if I were to hold it somewhere else it would not have the media attention that it has now.
"If I am to balance between the sensitivity of having it in Wootton Bassett and the possibility of continuing the quagmire and cycle of death in Afghanistan, then quite honestly I'm going to balance in favour of the latter."
'Dangerous and divisive'
Wiltshire Police said it had not received an application from any group to hold a march in the town.
Marches and demonstrations can be banned if police believe they are likely to endanger public order.
People in the town have lined the streets for the repatriation processions
Earlier, Gordon Brown, David Cameron and the town's MP James Gray all condemned the group's plans.
North Wiltshire MP Mr Gray told BBC Radio 5 live: "Fine Mr Choudary, say what you want, I detest what you say, but please, please don't come to Wootton Bassett."
Social Cohesion Minister Shahid Malik added: "Anjem Choudary rightly has a reputation as a dangerous and divisive figure in the UK, however, he does not speak for Muslims in the UK."
Wootton Bassett's mayor, councillor Steve Bucknell, said the town, which has a population of just over 11,000, was entirely inappropriate for any march, protest or demonstration which refers to Afghanistan or Iraq.
"We are going to do our utmost to make sure that this march doesn't go ahead," he said, adding that the town's council had received dozens of e-mails and phone calls from people concerned with the issue.
Locals have turned out to honour the corteges of more than 100 service personnel killed in Iraq and Afghanistan, as they made their way from nearby RAF Lyneham to a morgue in Oxford.
Islam4UK said its march would not coincide with a repatriation ceremony.