Police watched the plot unfold, then pounced

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The email sent by Assad Sarwar from an internet cafe in High Wycombe to an account in Pakistan in the summer of 2006 was meant to sound innocuous. With its reference to "Calvin Klein aftershave" costing "80 quid", its contents were crafted to meld seamlessly into the blizzard of data sent across cyberspace without attracting undue attention.

In reality, what looked like email trivia was one of dozens of coded updates sent by Sarwar, a restaurant delivery driver and the quartermaster of the liquid bombs plot, to the overseas jihadist masterminds of the conspiracy to cause carnage on an "unprecedented scale" in the skies above North America and the mid-Atlantic.

The "Calvin Klein aftershave" was far from being a business opportunity. It was code for hydrogen peroxide hair bleach, bought by Sarwar from a Welsh hairdressing supplies wholesaler, which had been concentrated by Abdulla Ahmed Ali, the charismatic ringleader of the British cell, to the 80 per cent purity required to turn it into the key explosive to be used in the attempt to simultaneously destroy at least seven airliners.

Unbeknown to both men, their visits to public telephone boxes and internet cafes in Walthamstow, north-east London, and Buckinghamshire between January and August 2006 were the subject of Operation Overt – the biggest surveillance operation in Britain since the Second World War – as dozens of MI5 and undercover Metropolitan Police Special Branch officers painstakingly tracked the conspirators' every move.

As well as collating the coded emails sent to and from Pakistan, the authorities used more than 200 undercover officers drafted in from across Britain to follow the plotters.

On 6 August 2006, Ali entered a small communications shop in Walthamstow to sit down in front of a pay- as-you-go internet screen.

Watched by a plain-clothes officer, the computer systems graduate opened the timetable page of the American Airlines website and began to note down the times of flights heading from London to North America. Crucially, the services were all leaving from Heathrow airport's Terminal Three on the same day and all within a window of about two-and-a-half hours.

The information was just the latest piece of a complex jigsaw of evidence, collated over thousands of hours of surveillance and investigation conducted across two continents, which led the Security Service and Scotland Yard's Counter Terrorism Command to the unshakeable – and terrifying – conclusion that the plot dubbed "Britain's 9/11" was moving to its "execution phase".

Equipped with technology bought from corner shops, electrical wholesalers and a street stall in Pakistan selling a brand of AAA-sized Toshiba batteries, Sarwar, Ali and his right-hand man, Tanvir Hussain, had brought together a sophisticated and well-financed mission to cause death and destruction with an ingenious tool previously unknown to law enforcement agencies across the world.

In a two-bedroom flat at 386a Forest Road, Walthamstow, which Ali bought for £138,000 in cash in July 2006, the team of young radicalised British Muslim men, gathered by their 28-year-old emir from among his acquaintances and childhood friends, began making the liquid bombs disguised in soft drinks bottles that were key to their "blessed operation".

The flat was also used by the group to record a series of suicide videos in which Ali warned Britons to expect "floods of martyr operations" in which "you will be destroyed".

Using instructions given by a bomb maker in Pakistan with links to al-Qa'ida, Ali and Hussain were in the finishing stages of preparing the empty 500ml bottles of Lucozade and Oasis which were to be filled with an explosive charge of hydrogen peroxide and a powdered soft drink called Tang – prepared in High Wycombe by Sarwar with such precision that he could recite the formula by heart.

It was a measure of the extraordinary detail of the planning that the men had perfected a way of ensuring each of the 18 bottles in the second-floor flat remained unopened by injecting the liquid explosive through the plastic nodule at the bottom and sealing the hole with superglue. Footage from a camera hidden in the property by MI5 showed Ali drilling holes in the bottles.

Hussain, 28, from Leyton, east London, who in his suicide video recorded on a camera kept by Sarwar bragged that he wanted to be resurrected to kill others until people realised "don't mess with the Muslims", was also tracked by police as he bought ingredients to make a powerful explosive, HMTD, which was to be placed in detonators concealed inside the hollowed-out Toshiba batteries. The resulting hole was to be concealed with black foam.

Experts declared the resulting weapons, which would have been detonated with the use of a power source such as the flash from a disposable camera, as "highly viable" and capable of completing their intended task: ripping a hole in an aircraft fuselage at 35,000ft.

Seven of the defendants in yesterday's retrial insisted that the devices, along with the suicide videos, were part of an alarming but ultimately harmless publicity campaign that was to have involved a "big bang" in the Houses of Parliament or Heathrow's Terminal Three, followed by the release of a "spoof" documentary containing the martyrdom films.

But after hearing six months of evidence at Woolwich Crown Court, a jury yesterday decided that the real intentions of Sarwar, Ali and Hussain were in a different league – that of calculating mass murder.

At about 9.30pm on 9 August 2006, after hurried consultation with the American authorities, the police moved in to arrest Ali and Sarwar. When officers asked Sarwar, whose work to buy the ingredients for the bombs had begun in April, if there was anything dangerous in his red Nissan Primera, he had the presence of mind to reply: "Only the handbrake." The contents of his boot – and the pockets of Ali – in fact contained damning evidence. In the boot were two of the six suicide videos, while, in Ali's jacket, was a computer memory stick containing the details of seven coinciding flights out of Heathrow to North America along with information about hand luggage rules at BAA airports. In a second pocket was a diary containing what prosecutors described as a "blueprint" for the attacks.

Among the notes discovered in the diary were: "select date, five days before jet, all link up"; "calculate exact drops of tang"; "one drink use, other keep in pocket, maybe will not get through machine"; and "dirty mag to distract".

The instructions tallied with an intercepted email sent from Pakistan to Ali on 13 July, which suggested a "rapping concert rehearsal" using "the bus service which is the most common over there" – code, according to prosecutors, for a dry-run in which one of the plotters was to test airport security and fly to North America using one of the "target" airlines – United Airlines, Air Canada and American Airlines. A senior counter-terrorism source said: "By the time of arrest, we believe they were within days of executing the plot. A lot of separate information came together to make it clear we were in the final stages."

What came together in the frenzied weeks of Operation Overt had begun in the aftermath of the 9/11 attacks. As Allied forces poured into Afghanistan, a refugee crisis that had festered for decades on the border with Pakistan grew worse and British charities, including the Islamic Medical Association, raised money to send volunteers and equipment to help. Among those volunteers were Ali and Sarwar who, at separate times between 2002 and 2003, worked at the bleak, windswept camps containing children wounded in fighting between Islamists and American forces.

The experience radically altered the world view of the two men and, as they began to shuttle between Pakistan and Britain over the next four years liaising with their jihadist controllers, Ali became the subject of interest for MI5 to the extent that they attempted – and failed – to recruit his alleged fellow conspirator, Arafat Khan, to become an informant. Unknown to Ali, when he returned to Heathrow from Pakistan in June 2006, agents opened his baggage before it reached the arrivals hall.

Inside they found a tin of Tang and a large number of AAA Toshiba batteries. The final unravelling of the plot had begun. When officers eventually searched the home Ali shared with his wife and young son, they found a document in which he had outlined the chilling core of his beliefs.

It read: "The psychology of war is that you can defeat your enemy if you take away that which they love the most and strike terror into their hearts. With martyrdom operations they achieve that as the most beloved thing is life and wealth. When your enemy is not scared to die it scares you."