A Birmingham council election candidate accused of improperly obtaining disability grants to improve his house insisted that he had no serious illnesses when first quizzed about the matter, it was claimed in court.

Liberal Democrat Saeed Aehmed was dropped as a candidate in Aston by the Labour Party a month before the 2002 city elections after failing to give satisfactory answers about four improvement grant applications worth £17,000 for his Bevington Road house.

The money paid for central heating, a washing machine and a downstairs shower room.

He joined the Liberal Democrats and was chosen to contest Aston at last year's council elections, but was beaten by Labour's Muhammad Afzal.

Mr Aehmed is appearing at Birmingham County Court after bringing an election petition alleging dirty tricks against Coun Afzal and the Labour Party.

It's alleged that Coun Afzal won the Aston contest with a majority of more than 600 votes off the back of a smear campaign which included false claims that Mr Aehmed was guilty of disability grant fraud and had been arrested for postal vote fraud.

Ian Reilly, Labour's regional director for the West Midlands, told the court that he had no option but to require Mr Aehmed to stand down as a council candidate after reading the housing improvement grant application forms.

According to doctors' letters read to the court, Mr Aehmed suffers from claustrophobia, agoraphobia, back pain, bad legs, depression and asthma. He has been claiming incapacity benefit for 25 years.

However, evidence given earlier this week by Coun Afzal suggested that Mr Aehmed had been fit enough in the 1990s to use a ladder to attach election posters to the tops of lamp posts.

Mr Reilly said there was a conflict between the answers given to questions on the grant application forms and the verbal assurances given to him by Mr Aehmed.

"He told me that whilst he had been in poor health with asthma he had never been house-bound, had never had problems going up stairs and yet at least one of the forms indicated that he was apparently totally disabled," Mr Reilly told the court.

When challenged about this Mr Aehmed appeared "evasive" and did not want to discuss the matter, Mr Reilly added.

There was no alternative in the circumstances but to require Mr Aehmed to stand down as a candidate in order for him to "prove his innocence", Mr Reilly added.

Had Mr Aehmed's selection as a candidate in Aston been approved by Labour there was no doubt that allegations about the disability grant applications would quickly appear in Birmingham newspapers and damage the party's credibility during the election campaign, Mr Reilly told the court.

Graham Brodie, appearing for Mr Aehmed, suggested that the West Midlands Labour Party operated a system which amounted to inventing allegations against Asian candidates who had fallen out of favour or who were seen as a threat to existing white councillors.

Mr Aehmed's replacement as a candidate had been engineered to save the skin of the sitting Labour councillor in Aston, Tony Kennedy, who was imposed as the official candidate following Mr Aehmed's dismissal, Mr Brodie said.

Similarly, in 2001, Labour moved to block the selection of Talib Hussain in Sparkbrook, claiming that Mr Hussain had been involved in a pyramid selling scam.

But the real reason was a desire to safeguard the position of sitting Sparkbrook councillor Mick Rice, a cabinet member and leading figure in the Birmingham Labour Party, Mr Brodie claimed.

Mr Hussain later became a Liberal Democrat councillor but fell out with the party and now sits as an Independent.