A terror cell planned to smuggle bomb ingredients into the UK using shampoo and shaving cream bottles and bags of dried fruit, the Old Bailey has heard.
Babar said they planned to hide detonators in a cassette recorder
The British men intended to sneak detonators, aluminium powder and ammonium nitrate into the country, "supergrass" Mohammed Babar said.
He said alleged plotter Omar Khyam of Crawley, West Sussex, believed he had "found" the right components for bombs.
Seven men deny charges including conspiracy to cause explosions.
Pakistani-born US citizen Babar, 31, is giving evidence for the prosecution and has been given immunity from UK charges.
He also claimed Mr Khyam unsuccessfully tried to recruit a London Underground worker to carry out a suicide bombing mission.
Babar told the jury Mr Khyam had discussed placing detonators inside a plastic bag and then hiding them in bottles of shampoo or shaving cream.
They bought a small cassette recorder in which to conceal the detonators in luggage, Babar added.
They also discussed disguising the ammonium nitrate - the oxidising agent for a bomb - in bags of almonds, raisins or dried apricots.
These would then be sent to the UK in a parcel via delivery company Federal Express, the court heard.
But this plan was abandoned when the because a certificate to ship foodstuffs was required, Babar said.
Instead, they decided to hide the ammonium nitrate in a shipping container.
Babar told the court that he and Mr Khyam purchased 10 to 15 packets of aluminium powder at a shop in the Pakistani city, Lahore.
Mr Khyam later gave a package of the aluminium powder to an associate who was travelling back to the UK.
The man - who did not know what was in the packet - went through security at Lahore airport and was pulled over.
"He was a collector of knives," Babar explained. "They pulled him over to see what was in his luggage. They saw that he just collected the knives so they let him through."
Mr Khyam was "satisfied" that they could get one of the ingredients through the airport, Babar said.
Suspects Salahuddin Amin, 31, from Luton, Bedfordshire, and Mr Khyam, 24, are alleged by the prosecution to have received training in explosives and use of the poison ricin in Pakistan.
According to Babar, a London Underground worker called Imran had also been at the training camp in 2003.
Mr Khyam "wanted to do a martyrdom operation using a belt bomb and he had Imran in mind", he told the jury.
"I asked Imran if he wanted to do it and he said no because he thought these guys would never carry it out."
Waheed Mahmood, 34, Mr Amin, Jawad Akbar, 22, Mr Khyam and his brother Shujah Mahmood, 19, all of Crawley, West Sussex, Anthony Garcia - also known as Rahman Adam - 23, of Ilford, east London, and Nabeel Hussain, 20, of Horley, Surrey, deny conspiring to cause explosions.
Mr Khyam, Mr Garcia and Mr Hussain deny possessing ammonium nitrate fertiliser.
Mr Khyam and Shujah Mahmood deny possessing aluminium powder.
The trial continues.