A 68-year-old Briton of Indian origin was held without bail after being arraigned in a federal court in Newark, New Jersey, Wednesday on charges that he tried to sell a shouldered-fired missile capable of bringing down an airliner to federal agents masquerading as terrorists.

Hemant Lakhani of London, arrested by the Federal Bureau of Investigation, was produced before Magistrate Judge Susan D Wigenton in New Jersey Federal Court.

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Lakhani's bail bond hearing is slated for August 18.

Lakhani, prosecutors said, arrived at JFK Airport from London on Sunday and met a government-cooperating witness to complete the sale of one SA-18 Igla shoulder-fired surface-to-air-missile manufactured in Russia.

He was charged with trying to provide material support and resources to terrorists and also working as an unauthorised arms broker, said Attorney Christopher J Christie of New Jersey, who along with FBI Director Robert Mueller and Department of Homeland Security Secretary chief Tom Ridge announced the filing of a criminal complaint against the Briton.

But Christie clarified that Lakhani does not seem to have any direct connection with terrorist groups. "We have nothing that is contained in this complaint that proves that he has any direct link with Al-Qaeda," he told rediff.com

"He has been trying to get arms into the US to be given to terrorist groups so that they can shoot commercial airliners in the sky," he said.

Two others, identified in court documents as Yehuda Abraham, 76, a New York City jeweller, and Moinuddin Ahmed Hameed of Malaysia, were also arrested along with Lakhani for allegedly helping in a planned money transfer that was part of the transaction.

Hameed, the complaint said, arrived from Malaysia on Sunday to allegedly arrange for $500,000 down payment from a government-cooperating witness for 50 more such missiles.

According to the prosecutors, the sting operation to nab the arms dealers had been going on for the past 18 month spanning three countries, and federal agents who posed as terrorists interested in buying such arms had been involved in busting the gang.

Attorney General John Ashcroft said the investigation involved law enforcement officials in Russia.

"This was a deadly serious business," Christie said. "Without the very effective intervention of the FBI, Newark, the Terrorism Task force and the indispensable help of the Russian FSB, Lakhani might well have paved the way for others do unimaginable damage."

According to the complaint, contact between Lakhani and the cooperating witness began in December 2001 with most of the conversations spoken in Urdu or Hindi.

When the witness showed interest in buying the arms, Lakhani allegedly told him that he could export weapons from the former Soviet Union. At one such meeting, he provided military arms brochure and business cards of people with whom he had connections.

Asked if Lakhani would be extradited to Britain since he is a British citizen, Christie said he would be charged and tried in the US since 'the conduct' was committed on American soil.

"Besides, we have been cooperating with the British government and they know everything we have been doing here on this case," Christie said.

Asked about his background, Christie declined to give details. "What we found about him is that he frequently travels around the world and certainly we know what he has been doing over the last 18 months when he has been trying his best to put things together to facilitate this deal. But beyond that I can't tell you," he said.