NEW YORK (AFP) - Al-Qaeda considered an attack on London's Canary Wharf just weeks after the Sept 11, 2001 attacks, said Monday a British terror convict hugged by Osama bin Laden and dispatched to blow up a US jetliner.

Al-Qaeda recruit Saajid Badat, 35, made the revelation while testifying against British hate preacher Abu Hamza, on trial in New York on multiple terror charges. Badat expanded on his earlier testimony last month at the trial of Osama's son-in-law, when he said Al-Qaeda had an almanac of the world's tallest buildings.

Khalid Sheikh Mohammed, the self-declared 9/11 mastermind, crossed out the two World Trade Centers as he leafed through the book looking for fresh targets in late 2001, Badat repeated.

But on Monday, Badat told the US federal court that Mohammed also asked about a target in Britain. "I believe Canary Wharf was mentioned," Badat said, referring to the business district with a high concentration of tall buildings in east London.

Badat was ordered by Al-Qaeda to blow up a US jetliner with bombs hidden in his shoes in late 2001 and met one-on-one with Osama before leaving Afghanistan.

The meeting ended "with him giving me a hug and wishing me luck in my mission", Mr Badat told the courtroom by video link from Britain because he faces arrest on US soil in connection with the bomb plot.

Badat spent three years from January 1999 to December 2001 in Afghanistan, where he worked for Al-Qaeda.

He pulled out of the shoe bomb plot but was arrested in Britain in 2003 and served six and a half years in prison for conspiracy to harm an aircraft.

His original intention in Afghanistan was to train for jihad and help other British recruits do the same, promising to return to Britain after six months and go to university.

He took a laptop equipped with encryption software "to encrypt messages sent back to Karachi and onto London" and an encyclopedia of jihad in CD format to help him.

He said he had orders from Babar Ahmad, who headed a group of young Muslims interested in violent jihad in London, to forge a path for other British recruits.

Ahmad, who also later spent time in Afghanistan, is currently detained in the US on terror charges.

In early 2000, he said he "brainstormed" potential terror targets with French citizen Zacarias Moussaoui, jailed for life in the US over the 9/11 attacks.

Together with Moussaoui and a third man, they discussed attacking the British Defence Ministry and the US Embassy in London.

Badat also suggested putting explosives into a small boat and crashing it into a larger ship, an idea that Moussaoui said he would mention to Al-Qaeda leaders.

But Badat refused to accept that the USS Cole attack, which used that strategy six months later, was his fault.

"If it really was, bin Laden and Abu Hafs would have come up to me and said thanks for the idea," he said.

Badat said he saw Abu Hamza twice in London, listening to him speak at the Finsbury Park Mosque in 1997.

He identified clips from an Al-Qaeda propaganda video that the US government said was confiscated from Abu Hamza's home.

Mustafa Kamel Mustafa, 56, better known in Britain as Abu Hamza al-Masri, has pleaded not guilty to 11 kidnapping and terror charges which pre-date 9/11.

He faces the rest of his life in a maximum security US prison if convicted in the Manhattan federal court after a trial expected to last well into May.

Blind in one eye and with both arms blown off at the elbow in an explosion in Afghanistan years ago, he sat quietly in the courtroom in black tracksuit bottoms and a navy T-shirt.

He is charged over the 1998 kidnapping in Yemen of 16 Western tourists, four of whom were killed, and conspiracy to set up an Al-Qaeda-style training camp in Oregon in late 1999.

He is also accused of providing material support to Al-Qaeda, of wanting to set up a computer lab for the Taleban and of sending recruits for terror training in Afghanistan.

Abu Hamza was indicted in the United States in 2004 and served eight years in prison in Britain before losing his last appeal against extradition.