The “bomb factory” allegedly used by the eight-strong terrorist gang to develop liquid explosives, with the intention of blowing up transatlantic airliners, was described in court today.

The flat in Forest Road, Walthamstow, East London, was bought by Abdulla Ali, the self-declared leader of the gang, for £141,191.63 in cash on July 20, 2006, the prosecution said, in its second day of evidence. The gang is accused of plotting to destroy seven airliners travelling between Britain, the US and Canada,

“It is the Crown’s case that this unoccupied property on a busy road in a residential area of Walthamstow was ideally situated to the needs of the conspirators in this case, because within days of the sale having been completed, the property had been transformed into a bomb factory,” Peter Wright, QC, for the prosecution, said.

Undercover police watched Mr Ali using the property several times between July 27 and August 9, 2006. The suspect lived near by. His co-defendants Tanvir Hussain, Ibrahim Savant, Arafat Waheed Khan, Waheed Zaman and Umar Islam were also seen meeting there.

Police conducted a detailed search of the two-bedroom property after the men were arrested in August. The jury was shown photographs of what the prosecution claims are bomb-making materials stored in cupboards in the kitchen. These included bottles of Lucozade and Oasis, AA batteries, wires, syringes, food dye and disposable cameras.

Forensic examinations of a mattress in the upstairs bedroom and the black flag used in the so-called martyrdom videos made by the suspects show that the recordings were believed to have taken place in that room. The videos were screened in court this morning.

The prosecution say that police watched the flat, installed an “audio probe” within it on July 31, August 3 and August 9, and overheard a number of conversations, as well as witnessing visits by many of the suspects “either entering or leaving the premises”.

In one conversation, read to the jury, Mr Ali is heard rehearsing what should be said to security officers who ask awkward questions. If a gang member is asked why he has only a one-way ticket, Mr Ali said he should answer that he is in a relationship: “I’m seeing her – I’ve got a condom in my bag.”

This, Mr Wright said, would explain why, in Mr Ali’s notebook, disclosed to the court yesterday, a reference was made to buying pornographic magazines and condoms to distract security guards.

Mr Ali, Mr Hussain and Mr Islam were seen and heard to have held meetings on the three days they were monitored, Mr Wright said. On July 31 Mr Ali was heard to discuss the alleged plot with Mr Hussain. Mr Wright said: “Ahmed Ali states that they had got 18, which may well be a reference to the number of personnel that they have recruited in order to board transatlantic aircraft, either singly or in pairs.”

The prosecutor said that 18 could also refer to the number of bombs to be carried on board the airliners. At one point, Mr Hussain asked how long they had got. Mr Ali replied: “A couple of weeks”, the court was told.

The two men also discussed who was available to carry out the alleged suicide mission and talked of flying from different terminals at Heathrow. Mr Wright said this showed that they were considering other flights as well as the seven specific services to North America. He said: “We say these men did not confine their horizons merely to transatlantic flights that left from Terminal Three notwithstanding the research that had been done.”

Mr Wright said it was not certain that detonating the devices in the pressurised cabins of the aircraft at 30,000ft would necessarily destroy them “in each and every case”. But he added: “What is clear, we say, on all the evidence is that the hope and expectation on the part of these men was that the detonation of these devices on board a passenger aircraft would have fatal consequences.”

In one of the bugged conversations, one of the men was heard to say: “It ain’t a hydrogen bomb yet till the batteries.”

They also discussed whether or not to take children on the mission. Mr Ali was heard to say: “I know a brother wanting to do that.”

Mr Ali, 27, Assad Sarwar, 27, Mohammed Gulzar, 26, Mr Zaman, 23, Mr Hussain, 26, Mr Savant, 27, Mr Khan, 26, and Mr Islam (aka Brian Young), 29 deny charges of conspiracy to murder and conspiracy to cause an explosion on an aircraft.

The trial continues.

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