Salahuddin Amin, aged 31, from Luton, had information passed to him about a “radioisotope bomb” while he was in Pakistan, the court was told.
The plan was to buy the device from the Russian mafia in Belgium, prosecutor David Waters QC said.
Amin and co-defendant Omar Khyam, from Crawley, are also alleged to have received “detailed” training in Pakistan in how to make the poison ricin, the court heard.
Along with five other British citizens, they deny plotting to carry out explosions in London using bombs made from ammonium nitrate fertiliser and aluminium powder.
The conspiracy was allegedly moving towards its “final phase” when arrests were made in March 2004.
Potential targets discussed by the gang, who already had the components for the bombs, are said to have included “the biggest nightclub in central London”, the huge Bluewater shopping centre in Kent and Britain’s power infrastructure.
Regarding the alleged radioactive bomb, Mr Waters said: “Amin told the police in interview he didn’t believe this could be genuine.
“Indeed, nothing appears to have come of this. However, it perhaps gives an indication as to Amin’s position in, and his usefulness to, the organisation.”
In 2003, Amin and Khyam were said to have attended a camp in Pakistan for explosives training and were also instructed in making ricin, the court heard.
The court heard they returned to Britain and bought the fertiliser - enough for four or five football pitches - in November 2003. The buyer said it was for his allotment.
Khyam, aged 24, his brother Shujah Mahmood, aged 19, Waheed Mahmood, aged 34, and Jawad Akbar, aged 22, are all from Crawley, West Sussex.
In the dock with them are Amin, Anthony Garcia, aged 23, of Ilford, east London, and Nabeel Hussain, aged 20, of Horley, Surrey.
All seven deny conspiring to cause explosions likely to endanger life between January 1, 2003 and March 31, 2004. Khyam, Garcia and Hussain also deny possessing an article for terrorism - the fertiliser. Khyam and Mahmood also deny possessing aluminium powder for terrorism.
The powder was found in plastic bags in a tin behind the garden shed at their family home. A list of synagogues, alleged to be “potential targets”, was also found there.
Police also discovered a heavily marked book “understanding solid state electronics” and another document titled “What to do if contacted by MI5 or Special Branch”.