The firebrand cleric is accused of breaching his bail conditions by plotting to flee the country.
A three-member panel at the Special Immigration Appeals Commission (SIAC) could return him to prison or send him back home on a 22-hour a day curfew.
Qatada, who was once described by a judge as "Osama Bin Laden's right hand man in Europe", was arrested last month and appeared before a two-day hearing at the SIAC court in central London.
In a written statement delivered to the commission, Home Secretary Jacqui Smith said British security services fear Qatada wants to use his network of terror contacts to "disappear".
She said: "Should Abu Qatada abscond, his supporters would base a significant propaganda campaign on this, further boosting Abu Qatada's already substantial extremist profile and influence which would damage UK national security," she said.
The Jordanian national is on bail pending the conclusion of lengthy attempts by the British Government to extradite him back to the Middle East.
The Court of Appeal blocked Qatada's deportation in May after ruling his conviction for terrorist acts in Jordan was based on evidence extracted through torture.
Ministers had hoped a "no torture" guarantee from the Jordanian Government would suffice. They are now appealing to the House of Lords.
Under his current bail conditions, Qatada must remain in his West London home and is barred from using the internet and telephone or meeting with named terrorists, including Osama bin Laden.
