OTTAWA - Momin Khawaja had a "grand design" of terrorist intentions that went far beyond the specific British bomb plot in which he allegedly participated, say federal prosecutors.

Crown attorney David McKercher, in arguments presented Tuesday at the Ottawa software designer's trial, pointed to previously released email traffic in which Khawaja spoke of the need for widespread economic and military jihad against western interests.

He and his alleged co-conspirators were "all supporting that goal and taking active steps to attain it," McKercher told Justice Douglas Rutherford, who is hearing the case without a jury.

McKercher rejected claims by defence lawyer Lawrence Greenspon that Khawaja's real aim was to fight western forces -- including Canadian troops -- in Afghanistan rather than attack civilians in Britain.

The federal Anti-Terrorism Act says people can't be convicted of terrorism if they're combatants in an "armed conflict" that conforms to the customary rules of international law.

But Khawaja doesn't qualify for that exemption for a simple reason, said McKercher. Despite his musings over the years, he never actually went overseas to fight in such a conflict.

"He can't be considered a combatant, whether lawful or unlawful, without being in Afghanistan. He's not there . . . he's a Canadian citizen who was working in Canada."

Even if it were otherwise, said the federal lawyer, the Taliban and al-Qaida forces in Afghanistan don't fit the definition of participants in a conventional war.

The Crown has called no expert evidence on that point -- an omission noted with some exasperation by Rutherford.

But McKercher insisted it's a "notorious" fact that the Afghan insurgents target civilians as well as military personnel, and thus can't claim any legal protection against terrorism charges.

In support of that contention he pointed to a recent open letter distributed by the Taliban warning that Canadian aid workers -- already targeted in one attack -- could come under fire again in future.

McKercher acknowledged that Khawaja wasn't necessarily aware of all the targets being considered by his British co-conspirators. But he said that was because the cell structure adopted by most terrorist groups operates on a "need to know" basis that limits the information given to any individual.

"It also limits criminal liability," Rutherford interjected, asking how the Crown can prove criminal intent if the accused wasn't fully aware of the cell's goals.

Khawaja faces seven terrorism-related charges, including a key allegation that he built a remote-control device, dubbed the Hi-Fi Digimonster, for use in bomb attacks.

Prosecutors say the device was to be used by five already-convicted British Muslims to bomb a nightclub, shopping centre and electric and gas facilities in the U.K.

The other counts against Khawaja accuse him of financing and facilitating terrorism, taking terrorist training and making a house owned by his family in Pakistan available for terrorist use.

McKercher argued that it really doesn't matter, for legal purposes, whether Khawaja wanted to employ the Digimonster in Afghanistan or Britain.

"He clearly had no concern at all whether it was going to be used for an attack on civilians, or an attack on military targets, or on soldiers of his own country . . . as long as it made a big bang."

Greenspon has asked Rutherford to quash all the charges against Khawaja on grounds that the Crown has failed to produce sufficient evidence to support them.

The defence lawyer has admitted his client developed the Digimonster and that he took weapons training at a camp in Pakistan.

But he insists the British plotters kept him in the dark about their plans to attack targets in and around London. Khawaja's personal goal, says Greenspon, was to join the Afghan insurgency as a "front-line jihadi soldier" and to use the Digimonster for attacks on military targets.

The defence has acknowledged that scenario could have included attacks on Canadian soldiers. But that's not the offence that Khawaja has been charged with, says Greenspon.

He claims the Crown has shifted its focus and raised the spectre of worldwide jihad because it's having trouble proving a direct link to the British bomb plot.

Rutherford has several options open to him on the defence motion to quash the charges.

The judge could throw out all the allegations and set Khawaja free, or uphold all the charges and let the trial continue. He could also toss some charges but let others stand.

If he rules there's enough evidence to continue, it will be up to Greenspon to decide whether to put his client on the stand to testify on his own behalf. The defence lawyer has so far refused to say if he will do so, and thus open Khawaja to cross-examination by the prosecution.