Australian Prime Minister Kevin Rudd's artist-activist nephew has been fined for offensive behaviour as he dressed up in Ku Klux Klan outfit to protest against racism at a demonstration outside the venue of the Australian Open.

Van Rudd, son of the Prime Minster's brother Malcom Rudd, and another man staged a protest outside the Rod Laver Arena against the recent spate of violence against Indians in Melbourne.

The protest from Van Rudd came after eight men were arrested for bashing two Indian students.