A Blackburn man who trained to be a shoe bomber said Osama bin Laden told him shortly after the September 11 2001 attacks that he believed a follow-up terrorist attack could doom the American economy.

Saajid Badat recounted his meeting with the al Qaida founder in videotaped testimony that was played yesterday for a federal jury in Brooklyn, New York City.

"So he said the American economy is like a chain," Badat said. "If you break one - one link of the chain, the whole economy will be brought down. So after the September 11 attacks, this operation will ruin the aviation industry and in turn the whole economy will come down."

Badat, 33, was convicted in London in a 2001 plot to down an American Airlines flight from Paris to Miami with explosives hidden in his shoes. His evidence came in the trial of a man accused in a 2009 plot to attack New York's tube network with suicide bombs.

Badat said he was supposed to carry out a simultaneous bombing with failed British shoe-bomber Richard Reid. In testimony recorded last month, Badat said he refused a request to testify in person because he remained under indictment in Boston on charges alleging he conspired with Reid and he has been told he would be arrested if he set foot in the United States.

Badat said he backed out of the bombing with Reid because of his reluctance, fear and the effect it would have on his family. He said he informed his handler in Pakistan by email but never notified bin Laden.

Arrested in November 2003, Badat is free after serving six years of an 11-year prison sentence. He testified that he began co-operating in part because he hoped to give evidence some day against Khalid Sheik Mohammed, who has claimed responsibility while in US custody as the architect of the September 11 attacks.

He said Mohammed gave final orders to himself and Reid, who is serving a life sentence.

"He just gave us advice, on how to interact with each other, how to contact each other," Badat said.

Badat said he believed Mohammed and others like him take advantage of vulnerable youths to carry out terrorism attacks. On cross-examination, he said he believed some of the September 11 hijackers were victims like the others who died that day, "to lesser extent, to a much lesser extent".

Reid and Badat travelled with each other just weeks before the planned December 2001 attacks, meeting for a time with a group of Malaysians who were preparing to perform a hijacking similar to the September 11 attacks, Badat said.

"I provided them with one of my shoes because ... both had explosives inserted into them," he said.