The veteran peace protester Brian Haw has rejected claims from anti-terror police that his camp is a potential terrorist target.
Anti-terror police insist the banners pose a 'very real' danger
The father-of-seven said that concerns that placards at Parliament Square could be used to conceal a bomb were misguided, Southwark Crown Court heard.
But police insisted the danger posed by Mr Haw's placards was "very real".
Ch Insp Andrew Robinson said a bomber was simply interested in "the most effective way" to carry out his aim.
He said: "It would not matter to the terrorist if it was a peace camp. They are indiscriminate, regretfully. They would seek to cause mass harm, mass panic."
However, Mr Haw said his "pink banners" which had been there since shortly after he set up his camp six years ago, were hardly likely to be regarded by a bomber as an ideal hiding place for an explosive device.
He suggested someone seeking an "immensely attractive target" would want to get much closer to Parliament.
Mr Haw, from Redditch, Worcestershire, is claiming both placards and other property, including "artworks by Banksy" said to be worth thousands of pounds, were illegally seized by officers in a night-time raid in May last year.
Judge Geoffrey Rivlin QC is expected to rule on the matter tomorrow.