A businessman from Edgware accused of trying to buy radioactive material for terrorist acts told a court how he wanted it to wash bank notes.

Abdurahmar Kanyare, 53, of Milling Road, Edgware, said he had no idea that he was negotiating to buy a potentially explosive substance.

He was recorded on tape arranging to buy 'Red Mercury' from the News of the World's undercover reporter Mazher Mahmood, also known as the 'Fake Sheikh'.

'Red Mercury' has been described on the internet as a possible radioactive substance of use to terrorists, but has never been confirmed to exist, jurors were told.

Kanyare told the Old Bailey that he was playing along' because he wanted to work out whether Mr Mahmood was a conman, saying that he was investigating it for the police.

The court heard how he asked the city banker Dominic Martins, 45, of Du Cros Drive, Stanmore, and the security guard Roque Fernandes, 44, of De Havilland Road, Burnt Oak, to help him find 'Red Mercury'.

Kanyare claimed that, at first, he had no idea it was radioactive, despite having a discussion about using a Geiger counter to test it.

He told the court: "I've never heard of a Geiger counter. We all wanted to make money but we only wanted to make money from washing notes."

The three men claim they were entrapped by the controversial techniques used by Mr Mahmood.

Fernades, Martins and Kanyare all deny conspiracy to enter a funding arrangement for the purposes of terrorism, entering into a funding arrangement for the purposes of terrorism and conspiracy to possess an article for terrorist purposes between July 1, 2004, and September 25, 2004.

The trial continues.