On the opening day of a trial in Newark, New Jersey, prosecutors alleged that Hemant Lakhani, 69, told an undercover FBI agent that the rockets could be used to shoot down 10 to 15 aircraft on the second anniversary of the September 11 terrorist attacks.

Amid tight security, with sniffer dogs and anti-terrorist agents surrounding the courthouse, the US attorney general's office alleged that Mr Lakhani knowingly provided material support to terrorists and attempted to sell arms without a licence. Mr Lakhani, who denies all the charges, could face up to 25 years in prison if convicted.

US law enforcement officials hailed the arrest of Mr Lakhani, from Hendon, north London, in August 2003 as a significant coup in America's war on terror. But Mr Lakhani, who has no known links to terrorist organisations, has since been painted as an opportunist amateur lured by the prospect of a multi-million dollar payout.

He claims he was the victim of a sting operation in which both the purported buyer and seller of the Russian-made missiles were undercover law enforcement officials.

Using more than 200 secretly recorded audio and video tapes - including one taken just minutes before the arrest - the attorney general's office argued that Mr Lakhani knew precisely what the missiles would be used for.

Prosecutor Stuart Rabner told the court: "This case is about a man who enthusiastically tries to sell 200 shoulder-fired surface to air missiles to people who he believed would use them to shoot down planes in the sky with people aboard as part of a terrorist attack on the United States."

According to the Press Association, Mr Lakhani is heard on the tapes praising Osama bin Laden and claiming the terror leader "straightened them all out" and "did a good thing". The indictment alleges that Mr Lakhani told the undercover agents "he could procure anti-aircraft missiles, anti-aircraft guns, tanks and armoured personnel carriers, radar systems and explosive devices known as dirty bombs".

Mr Rabner said Mr Lakhani had "spent more than a year and a half eagerly trying to make this deal happen ... all the time issuing advice on how to shoot planes out of the sky to shake the US economy". He claimed Mr Lakhani had suggested targeting 10 to 15 airports at the same time, noting that each commercial airliner would carry an average of 400 people.

The busiest flight days, he was alleged to have said, were Mondays and Fridays.

He added that there was a "mood of celebration" in the hotel room moments before it was raided by FBI and customs officers. But Mr Lakhani claims he was set up in a multinational sting operation involving US and Russian intelligence agencies.

His defence lawyer, Henry Klingeman, will argue that as there was no real buyer, no real seller and no real missile - the weaponry Mr Lakhani is alleged to have been passing on was fake - there is no real case. Mr Lakhani bought the only rocket in question from a Russian intelligence agent and was about to sell it to the FBI.

"They were looking for somebody. After September 11, they couldn't find or pick up anybody," Mr Lakhani said in a recent interview with the Press Association from Passaic county jail in New Jersey, where he has been since his arrest near Newark airport.

"The only way to find someone was to make a scapegoat."

Mr Lakhani claims he was entrapped by the US agent, who kept offering more money whenever he failed to find any missiles.

"He'd say I've got $20m (£10.6m), I've got $10m, I've got so many million. All these temptations and temptations."