A gang of alleged terrorists armed with explosives was arrested just before they had decided on the targets for a bombing campaign on the British mainland, the Old Bailey heard today.

On the first day of what is expected to be a four-month trial of seven men, all British citizens, a jury was told that a plot stretching from New York to London and Pakistan was hatched in 2003 to set off a series of explosions in the UK.

"The interception came only when most of the necessary components were in place and all that remained before their plans achieved their ultimate goal was for the target or targets to be finally agreed," said David Waters, QC, prosecuting.

"They played their respective roles in a plan to acquire the ingredients necessary to manufacture a bomb or bombs which would be deployed at the very least to destroy strategic plant within the United Kingdom, or more realistically to kill and injure citizens of the UK."

All of the defendants are charged with conspiring between January 1, 2003, and March 31, 2004, with Mohammed Momin Khawaja, a Canadian, and with others unknown, to "cause by explosive substances, an explosion or explosions of a nature likely to endanger life".

The accused are: Omar Khyam, 24, Waheed Mahmood, 34, Shujah Mahmood, 19, and Jawad Akbar, 22, all from Crawley, West Sussex; Anthony Garcia (also known as Rahman Adam), 23, of Ilford, East London; Nabeel Hussain, 20, of Horley, Surrey, and Salahuddin Amin, 31, from Luton, Bedfordshire. They deny the charges.

Khyam, Garcia and Hussain are also accused of possessing more than half a tonne of ammonium nitrate fertiliser, which can be used to make bombs. The cache was during a police raid on a West London storage depot in 2004.

Waheed and Shuja Mahmood, who are brothers, also deny having aluminium powder for terrorism between October 1 2003 and March 31, 2004. Aluminium powder can also be used to make bombs.

Mr Waters said the case against the men would rely on the evidence of Mohammed Babar, an American citizen arrested in New York in March 2004 on terrorism charges. Babar subsequently pleaded guilty in secret to a string of crimes, including two offences which Mr Water said related to the "British bomb plot".

Mr Waters explained that Babar, a former member of al-Muhajiroun, an extremist group formally banned in the UK, had immunity in this case, and that he would be presented to the Old Bailey as a witness who had contact with most of the defendants.

"He has an insight as an insider into the events and plans which an outsider could not have," said Mr Waters.

Babar, Mr Waters explained, was an American Muslim who had become disenchanted with the West after the first Gulf War. He left the US soon after the September 11 attacks and went to live in Pakistan in late 2001. While he was in Pakistan, he met Waheed Mahmood and went on to instruct the defendants in the use of explosives.

Mr Waters said that Babar communicated with the group over the following years, using false names and code, such as the word "cigarettes" for "detonators". He said that in the spring of 2003, Babar accompanied two of the defendants, Mr Garcia and Mr Khyam, for terrorism training in Kalam, northern Pakistan, where they pretended to be tourists.

He said the group blew a u-shaped hole in the ground with a small quantity of ammonium nitrate-based explosives. In a conversation the same spring, Mr Khyam, alleged to be one of the most active figures in the plot, said that the group planned to attack "pubs, nightclubs or trains".

"Khyam’s motivation, as explained to Babar, was clear. The UK was unscathed, it needed to be hit because of its support for the US," said Mr Waters.

The plot was broken up after extensive surveillance by police anti-terrorism officers and the security services, according to the prosecution.

Bugs were placed at an address where Mr Khyam was staying in Slough, in Berkshire, in his car and at Mr Akbar’s house in Uxbridge, West London. Mr Waters said some of the surveillance tapes would be played to the court.

Earlier, the judge, Sir Michael Astill, warned the jury not to research terrorism on the internet during the trial but he acknowledged that it was an unavoidable subject: "Terrorism has been at the forefront of matters and debate worldwide for a long time... It would not be reasonable to expect you to approach your task now as if you had never had an opinion."

The trial continues.

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