A New York federal judge has set the terrorism trial of Osama bin Laden's son-in-law for January after defense lawyers said US budget cuts would make it hard to prepare by an earlier date.

Judge Lewis Kaplan issued an order signed Tuesday fixing a January 7 start date for the trial of Sulaiman Abu Ghaith.

Alleged to have been the late Al-Qaeda founder's propaganda chief, Abu Ghaith is accused of conspiring to kill Americans. He has pleaded not guilty.

His court-appointed lawyers said this week that the judge's original plan for a September trial would be "very difficult" to meet because automatic federal spending cuts require them to be furloughed for five and a half weeks.

Defense attorneys also question whether Abu Ghaith can get a fair jury trial in a courthouse just a few blocks from the site of Manhattan's World Trade Center, where nearly 3,000 people died in the September 11, 2001, Al-Qaeda attacks.