Hemant Lakhani is due to go on trial in a New Jersey court this year but says that he was ensnared in a plot involving a sting operation, a professional informant, secret videotapes and a fake missile.

When the London-based Mr Lakhani, 69, was arrested last year amid much publicity he was branded by American prosecutors as a terrorist sympathiser involved in attempting to smuggle surface-to-air missiles into the United States to shoot down airliners. According to court papers Mr Lakhani believed that the missiles would be used to shoot down American airliners by Islamic terrorists.

Mr Lakhani was described by prosecutors as a “true believer in the cause that America should be attacked and that its citizens should be killed”.

But the businessman, interviewed in jail, claims that there was no missile, no buyer and no seller. A devout Hindu who had travelled the world in search of deals, he says he was trapped after he was asked to use his global business links to find backers for a $1 billion (£556 million) Indian oil refinery project from which he stood to make $2.5 million.

He was introduced to a potential investor claiming to be a rich Saudi. In fact he was a career informant called Air Haji, also known as Mohammed Habib Rehman, who has worked for the FBI and US drug investigators.

Shortly after September 11, 2001, Mr Haji told Mr Lakhani that he represented the Ogaden Liberation Front, a rebel group seeking independence in a region between Somalia and Ethiopia.

Mr Haji said he was interested in shoulder-fired missiles, and the Briton, desperate to please his potential investor, promised to try to find some.

By April 2002 Mr Lakhani had virtually given up until he received a call from a Saudi oil executive who put him in touch with a man in Ukraine named Sergi.

Sergi, who is believed to have been working for Russian intelligence, said that he could suppy Igla shoulder-fired missiles. Mr Haji wanted the missile sent to the Middle East, then to America. He said that if Mr Lakhani could complete the deal he would make “so much money . . . the floodgates will open”.

Mr Lakhani said Mr Haji wanted 200 missiles, starting with an initial order for 20, but he required a sample. The deal was worth $21 million and the Londoner would get a cut.

Mr Lakhani met Mr Haji in September 2002 at an hotel overlooking Newark airport in New Jersey. Mr Haji told him that if he could get his hands on an Igla missile he would shoot down an aircraft in a plan to “ruin the American economy”.

All the conversations were being recorded by FBI agents and, according to the charges against Mr Lakhani, he suggested that America would be shaken if 15 airliners were shot down.

Mr Lakhani denies the comment but admits that he knew the sale was illegal. He said: “All along he wanted to entrap me. He was begging and begging me. He’d say, ‘I’ve got 20 million, I’ve got 10 million, I’ve got so many million.’ All these temptations and temptations.”

In August last year Mr Lakhani and Mr Haji met again in Newark to inspect the weapon, which was a fake. Mr Haji excused himself, and the room was stormed by FBI agents and Customs officers.

Mr Lakhani’s lawyer, Henry Klingeman, argues that the case was entrapment and that any person would have been tempted to get involved in a scheme that promised a multimillion-dollar pay day.

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