OTTAWA - The federal case against a Montreal man accused of terrorist ties could be on the verge of collapse due to a dispute over secrecy.

The government says it has withdrawn evidence against Adil Charkaoui because disclosing related information to him would endanger national security -- a move that might scuttle the entire proceeding.

The disputed material was apparently gathered through secret interceptions, informants and foreign sources, all of which the government is leery of exposing.

In a submission to the Federal Court of Canada, the government acknowledges that the remaining evidence on file doesn't "meet their burden of proof" to support the national security certificate being used to deport Charkaoui.

The government continues to argue, however, that Charkaoui should not be allowed to stay in Canada, and it wants the Federal Court of Appeal to rule on the disclosure issues, with the ultimate aim of breathing new life into the certificate.

The certificates are rarely used immigration provisions for expelling foreign-born individuals considered a security risk to Canada.

Charkaoui, 36, a landed immigrant from Morocco, was arrested in Montreal in May 2003 as an alleged al-Qaida sleeper agent prepared to wage terror attacks against western targets.

The married French teacher, who has three young children, denies any involvement in terrorism.

Charkaoui and four other men -- Mohamed Harkat, Mahmoud Jaballah, Mohamed Zeki Mahjoub and Hassan Almrei -- face removal from Canada under security certificates. All are fighting to remain in the country.

The unexpected development in Charkaoui's case marks the third serious blow to a security certificate case this year.

Revelations that the Canadian Security Intelligence Service failed to disclose certain evidence in the Harkat and Almrei cases have raised serious questions about those proceedings.

After withdrawing the disputed evidence in Charkaoui's case, the government filed an updated and considerably slighter public summary of the allegations against him with the Federal Court.

It has dropped accusations that Charkaoui described the war in Afghanistan in November 2001 as a battle against Islam "led by the wicked and the Crusaders," and that he a conversation the previous year with two others about their apparent desire to seize control of a commercial plane.

Charkaoui now wants Justice Daniele Tremblay-Lamer, who is hearing his case, to "go inside, deeper and deeper in my file, and to find the truth."

"They're playing with my freedom, with my rights," he said in an interview. "I'm really upset by this behaviour."

Under the certificate process, the federal immigration and public safety ministers present the case against a person to a Federal Court judge, who weighs the evidence before deciding whether the certificate should be upheld or tossed out.

The government says even if Tremblay-Lamer agrees that the certificate against Charkaoui is invalid for lack of evidence, the matter should not end there.

It wants her to declare that the case raises issues of general importance to all security certificate cases that should be aired in the Federal Court of Appeal.

The government is also asking the judge to suspend the certificate's cancellation for seven days, giving it time to ask the Court of Appeal to maintain Charkaoui's current conditions of release.

Charkaoui fears his fight for freedom could last for several more months or years: "They cannot play with national security and with the life of people in this way."

Though free on bail, he cannot travel outside the country and must wear an electronic ankle bracelet that tracks his movements. He must also give Canadian border agents 48 hours' notice before leaving Montreal, cannot associate with certain people, nor use computers outside his home.

Tremblay-Lamer recently asked the parties for fresh submissions on questions including the release conditions and whether she should evaluate the certificate against Charkaoui in light of the government's admission of insufficient evidence, or whether the government should simply withdraw the certificate on its own.

Justice Department spokesman Christian Girouard said he could not comment because the matter is before the courts.

Federal lawyers handling the case were not immediately available.