One of three alleged suspects in the missile sting arrives at court

Hemant Lakhani, 68, from London, was charged at the federal courthouse in Newark, New Jersey, over supporting terrorism and weapons smuggling.

The actual charges were "attempting to provide material support to terrorists" and "engaging in the sale of foreign defence artillery without a licence", according to US attorney Christopher Christie, outside the courtroom.

Mr Lakhani was arrested on Tuesday, after the sting in which officials posed as terrorists prepared to buy the Russian-made Igla missile with the aim of shooting down a US plane.

With some degree of success, it can bring down any size of airliner Chris Yates Security analyst, Jane's Aviation Power of an Igla missile

Mr Lakhani had demanded $5m (�3.1m) for 50 missiles from the FBI agents posing as terrorists, Mr Christie said.

Mr Lakhani "knew full well" the missile would be used to "attempt to kill American citizens and to try to shake the ability of our American economy", said Mr Christie.

In taped conversations Mr Lakhani had derided US citizens and called Osama Bin Laden, responsible for the 11 September terror attacks, a "hero", he said.

The terror charges carry a maximum 15-year sentence and the smuggling charges carry 10 years, according to Mr Christie.

Mr Lakhani was remanded in custody without bail, and is due to appear before the court again on 18 August.

London raids

Reporters said Mr Lakhani, looking tired and drawn, spoke only to his lawyer during the five-minute hearing.

His wife sat a few feet away in the small courtroom which was packed with journalists.

A house, believed to be Mr Lakhani's home, was raided on Wednesday

Two other men also appeared in court - one alongside Mr Lakhani, the other in New York - on money laundering charges in connection with the plot.

Earlier on Wednesday, British anti-terrorist police raided two addresses in London - one of which is believed to be Mr Lakhani's home.

Scotland Yard said the raids were conducted at the request of the FBI, and no arrests were made.

Neighbours at the semi-detached house in Hendon, north London, said the Lakhanis seemed "normal, quiet" people.

'Effective weapon'

Secret services from the US, Russia and Britain were involved in the sting operation, which began 18 months ago.

The BBC's correspondent in Washington, Justin Webb, said questions would be asked about whether Mr Lakhani would have been able to get as far as he did without the security services' encouragement.

For Russia, the US and the UK to work together like this is a bit of a breakthrough Tom Mangold BBC 'Old enemies' work together

The Igla missile, which has a 4km range and an infrared capability, was blamed for the shooting down of a Russian helicopter in Chechnya last year.

The Igla provided by the Russian security services in this case had been modified so it could not be fired.

The Igla missile is a "very, very effective" weapon, Jane's World Armies editor Charles Heyman told BBC Radio 4's Today programme.

"It is an advanced surface-to-air missile, which could have devastating potential in the hands of terrorists," he said.

No terrorists have been involved in the alleged plot, but three attempts by groups linked to al-Qaeda to shoot down planes carrying Western or Israeli passengers have been foiled in 15 months.