A 21-year-old market stall holder was today convicted of terrorism and faced a lengthy prison sentence after plotting to "hunt down" and kill a decorated British soldier.

Abu Mansha obtained an address for Corporal Mark Byles, who led a bayonet charge killing up to 20 Iraqi rebels.

When Mansha's flat was searched, police found a blank firing gun in the process of being converted to shoot live rounds. Also recovered was a stash of DVDs brimming with "virulent anti-Western propaganda", London’s Southwark Crown Court was told.

Some featured Osama bin Laden, the al-Qaeda leader, while one depicted the gruesome beheading of British hostage Ken Bigley.

In a bag behind the sofa, officers discovered a copy of the Sun newspaper featuring an article headlined Lionheart Bayonet Charge Hero To Get Bravery Gong, and detailing how the Corporal led a charge on a trench of rebels which left at least five insurgents dead.

The story went on to describe him rifle-butting, punching and kicking rebels in hand-to-hand combat. He was quoted saying: "It was either me or them." Another paragraph had been circled. It read the recruit "reckons he killed between 15 and 20 insurgents".

Mansha, whose fingerprints were found on the newspaper, denied having anything to do with terrorism, and said most of the items found in his apartment were connected with research he was helping a journalist friend with. He also told jurors he was neither a strict Muslim nor had any strong political views.

The defendant, of Arnott Close, Thames Mead, south-east London, also insisted he had bought the pistol from a market stall as a souvenir.

But the seven women and five men trying him decided he was lying and after seven hours deliberations convicted him of one count under Section 58 (1b) of the Terrorism Act. That stated the information in his possession was "likely to be useful to a person committing or preparing an act of terrorism".

Mansha remained impassive as Judge Nicholas Loraine-Smith told him that because he had been found guilty of a "serious and unusual" offence he needed a pre-sentence report before he dealt with him. He adjourned the case until January 26 and Mansha, who has a previous conviction for affray following a racial confrontation with another market stall holder three years ago, was remanded in custody.

Cpl Byles gave evidence at the two week trial from behind screens, offering jurors a brief but graphic account of the bloody confrontation in the "volatile" area of Al Amarah on May 14 last year, which was to trigger Mansha’s plot for revenge.

Describing the ambush, he recalled: "I had two choices: stay there and be cut to pieces... or put down concentrated fire and attack the positions, which is what I did.

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