Khaled Merhi, 40, was arrested at his family's home on Cleveland Street on July 29 in one of five raids across Sydney relating to an alleged plot to bring down a plane with a bomb concealed in a meat mincer.

Bomb squad officers combed the terrace for several days.

Mr Merhi was detained for seven days then released without any charges relating to the alleged plot.

However, police charged him with possession of a prohibited weapon.

At Mr Merhi's first appearance in the Downing Centre Local Court on Thursday, his lawyer Moustafa Kheir entered a plea of not guilty.

Mr Merhi appeared in court a black suit jacket and jeans. He sustained serious facial and shoulder injuries during his arrest but was not wearing a sling on Thursday.

Mr Merhi's brother, Abdul Merhi, was also released without charge following the raids.

Brothers Khaled and Mahmoud Khayat, who are related to the Merhi brothers through marriage, were both charged with plotting the attack.

On Tuesday, Lebanese authorities revealed that they had been monitoring four members of the Khayat family after brother Tarek moved to Syria a year ago to fight with Islamic State.

They alleged that the men tried to smuggle two bombs onto the aircraft, one hidden in a Barbie doll and one in a meat mincer.

A fourth brother, Amer Khayat, was supposed to carry the two bombs on board and detonate one after 20 minutes.

However, the bag was seven kilograms over the weight limit so it was not checked in, Lebanese Interior Minister Nohad Machnouk said.

Amer Khayat allegedly gave the bag to Khaled Khayat who took it back home to his Lakemba unit and dismantled it.

Amer Khayat continued on the flight but was detained when he arrived in Lebanon.

The Etihad flight from Sydney to Abu Dhabi on July 15 was carrying 400 passengers, including 120 Lebanese nationals.

Fairfax Media understands that Australian authorities had no information relating to a Barbie doll and there is no mention of it in the allegations put before court in Sydney. The Australian Federal Police allege that there was one bomb only and it was concealed in the meat grinder.

The revelations about Amer Khayat contradict information from the federal police, who alleged last month that Amer Khayat was an unwitting stooge. However Fairfax Media understands that it was initially a working theory based on the fact the federal police hadn't been able to speak to him.

A second plan, involving building a gas dispersion device to possibly release on public transport, was allegedly in its infancy when Australian police swooped on July 29.

Khaled Khayat, from Lakemba, and Mahmoud Khayat, from Punchbowl, will reappear in court in November.

Khaled Merhi's matter was adjourned until October.