Radical Muslim preacher Abu Hamza has had his house confiscated by the Legal Services Commission to pay legal bills.
Hamza, jailed for seven years in 2007 for inciting murder and stirring up racial hatred, is fighting extradition to the US on terror charges.
The LSC has now seized his house in Greenford, west London, despite Hamza claiming it belonged to a relative.
It will be sold to pay some of the £300,000 cost of his defence. Officials hope to raise £280,000 from the sale.
Carolyn Regan, chief executive of the Legal Services Commission, said: "The Legal Services Commission can confirm it has taken possession of Abu Hamza's property, as a contribution to recovering the legal aid costs spent on his defence.
"The LSC will not tolerate people trying to conceal their financial assets in an attempt to have their defence costs paid for by the taxpayer.
She continued: "Legal aid is a vital public resource and we are committed to ensuring it is spent on those who most need help with their legal problems and can least afford it."
The High Court granted a seizure order after lawyers proved Hamza was the true owner of the property.
Hamza, an Egyptian national, has been fighting extradition to the US since 2004.
He is accused of helping to set up terrorist training camps.
The case is now at the European Court, where Hamza is arguing that he would receive inhumane treatment in the US.
In February 2006, an Old Bailey jury found him guilty of charges related to speeches at Finsbury Park Mosque in north London.
Last year his three sons Hamza Kamel, 22, Mohamed Mostafa, 27, and Mohssin Ghailam, 28, were jailed for between two and four years for taking part in a £1m luxury car scam.
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