Political analysts have greeted the plot allegations, which initially led to the detention of some opposition figures, with scepticism, saying they looked intended to putting pressure on Zimbabwe's beleaguered opposition movement.
Peter Hitschmann, a soldier in the former white government of Rhodesia -- Zimbabwe's name before independence in 1980 -- was arrested early this month with six other people.
Hitschmann and the other six, including an opposition legislator, were seized after police discovered an arms cache at Hitschmann's home in the eastern border city of Mutare.
The government says the arms cache included AK-47 automatic rifles, machineguns, shotguns, pistols, revolvers, tear gas canisters, flares, thousands of rounds of ammunition and a two-way radio communication system.
The state argues that the weapons were meant to be used to disrupt Mugabe's 82nd birthday celebrations in Mutare last month where the veteran leader was feted at a stadium by thousands of supporters of his ruling ZANU-PF party.
''The quantity is such that it cannot be accounted for by reason of personal use alone. It is presumed that the weapons were intended for acts of insurgency,'' the prosecution said in its case outline.
Police said the arms were discovered on March 6, after Mugabe's party, but have also said investigations into the alleged plot had started earlier.
The original venue for the birthday party was changed suddenly just before the event, but authorities have not confirmed whether this was linked to the alleged plot.
The state last week dropped charges against Hitschmann's co-accused but court officials said the High Court had yesterday denied him bail.
Hitschmann's lawyer was not immediately available for comment, but prosecutors said the High Court had accepted their argument that the ex-soldier might jump bail because the charges he faces carry a possible life sentence.
Last week police said a former MP of the opposition Movement for Democratic Change, Roy Bennett, who is wanted over the anti-Mugabe plot, had fled to neighbouring South Africa.
Hitschmann is a licensed arms dealer. While his defence has argued that some of the seized guns were hardly the stuff to overthrow a government, prosecutors said his licence was strictly for non-military weapons.
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