Padilla was arrested at Chicago airport
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US terror suspect Jose Padilla had been planning to blow up apartment buildings and use a "dirty bomb", according to US Deputy Attorney General James Comey.
The former Chicago gang member has been held without charge at a US military prison as an "enemy combatant" for the past two years.
Mr Comey said the US Justice Department was releasing new information about him in order to explain his imprisonment.
He is accused of having undergone al-Qaeda training in Afghanistan.
Senior al-Qaeda contacts
The Justice Department outlined that training, which they say brought Mr Padilla into contact with the most senior members of the terror network.
Mr Padilla's intention was to rent a number of apartments and then simultaneously explode them, using natural gas - having scouted out apartments which had gas heating, Mr Comey said.
He described the plot as "remarkable for its scope, its clarity".
Mr Padilla was arrested at Chicago Airport in May 2002, accused of planning to detonate a "dirty bomb" - the name given to a device which spreads radioactive material using conventional explosives.
No evidence has ever been brought before a court.
Lawyers have been challenging US President George W Bush's right to hold Mr Padilla, and fellow detainee Yaser Hamdi as "enemy combatants" indefinitely, arguing that Mr Bush is exceeding his authority by denying them access to lawyers and courts.